Tax Day and Leveling
So it’s almost tax day, April 17th this year. In a way, it’s an ultimate batch process, everybody having their returns due the same day during the year. That’s over 135 million tax returns. All at once.
It probably wouldn’t be fair to do it any other way, but it sure does create seasonal demand spikes for tax prep services, companies who have to prep tax documents after the start of the year, and the IRS having to process them. Oh yes, and the USPS having to transport all of those returns.
The one thing that helps level this IRS workload out… the tax refund. 4 out of 5 taxpayers will get a refund this year, which creates a built-in incentive to file as early as possible, so you get that refund earlier. Let’s ignore, for now, that getting a refund is economically non-ideal, as you’ve given an interest-free loan to the government.
If everybody had to write a check, instead of getting a refund, everybody who was smart would write that check and mail it on the last possible day.
So why are the post offices so crowded up until midnight on tax day? I guess we really are procrastinators.
Other stats, things that you could argue help “lean out” the process (reducing waste of paper, transportation, or waiting) include electronic filing (65% in 2004) and electronic direct deposit of refunds into bank accounts.