Tax Education: Why it matters, and what should be done

Yesterday I read an interesting blog post about the consequences of tax education deficiency. In the post, the author uses the current estate tax debate to illustrate how easy it is for media and political pundits to mislead the public simply because most people simply have no idea how our entire tax system works.

It’s true. Think back to high school; did you have a class called “Taxes in America?” I’m willing to bet the answer is no. Even the required economics classes barely touch on taxes, let alone how they function and what that means to us as taxpayers. Unless your major in college was accounting, odds are pretty good you didn’t take any coursework in taxes at all. So, what does that mean?

There are a number of consequences.

The first being: we have no idea how to do our own taxes. This means we miss deductions and credits, we are not confident with what we put on our tax returns, and suffer from a general sense of panic at our tax situation.

Second: we make less tax-savvy choices with our money all year long. We over withhold our income taxes, which costs us money; we do not save for our retirement in tax-friendly ways, and we pay way too much in taxes as a result.

Third (and the original post’s point): we are vulnerable to being misled by the talking heads so prevalent in news today. Because we are lack education in taxes, we don’t know enough to question what is being shouted at us from the TV. The end result, we may be manipulated into voting in ways that are not in keeping with our true political ideologies. Simply put, we just don’t know when the truth is being stretched.

Of course I encourage every single taxpayer to take the initiative and learn about how taxes impact his or her own life. The big question is, is that enough? What would it take to educate our nation on taxes? Tell me what you think on Facebook and Twitter #taxeducation.

(hat tip: Mauled Again)