99% Invisible: "I've Got 1099 Problems..." Summary

Episode Title: I've Got 1099 Problems...
Host: Roman Mars
Release Date: April 15, 2025
Guests:

• Joel Slemrod, Professor of Economics at the University of Michigan
• Kurt Kohlsted, Co-author of 99% Invisible City
• Vivian Le, Producer

Introduction: The Omnipresence of Design in Taxation

Roman Mars opens the episode by delving into the intricate relationship between taxation and design, highlighting how taxes have historically influenced not just economies but also the built environment around us. He sets the stage for an exploration of nearly 250 years of U.S. tax history to unravel the complexities and frustrations surrounding the modern tax system.

Historical Origins of Taxation in the United States

Discovery and Early Tax Systems
The conversation begins with an anecdote about the discovery of the Rosetta Stone by French army engineers in 1799, narrated by Joel Slemrod (02:12). The Rosetta Stone, inscribed with the same message in three scripts, was pivotal in deciphering hieroglyphics, symbolizing how foundational documents can unlock complex systems—paralleling how tax codes shape societal structures.

Colonial Taxation and the American Revolution
Kurt Kohlsted corrects a common misconception about the Boston Tea Party, explaining that the event was not solely about high taxes on tea but rather Britain's attempt to undercut the illegal tea trade by lowering taxes on legal imports (04:12). This nuanced understanding underscores the deep-seated American aversion to tax overreach, which was a significant catalyst for the Revolution.

Post-Revolution Taxation and the Civil War
Post-independence, the U.S. maintained low and simple taxes, primarily relying on excise taxes and tariffs. However, the Civil War necessitated the introduction of the first federal income tax in 1862, which generated $55 million for the Union (06:08). This marked the beginning of the federal government's reliance on income tax as a revenue source.

Taxation as a Tool for Social Engineering

Early Income Tax and Its Repeal
The initial income tax was short-lived, being repealed in 1872 as the economy stabilized. Excise taxes remained dominant but were regressive, disproportionately affecting lower-income individuals (07:12). This inequity fueled calls in the late 19th century for a more progressive tax system.

The 16th Amendment and Modern Income Tax
In 1913, the 16th Amendment was ratified, granting the federal government the authority to levy an income tax (09:32). This shift transformed the tax system from a class tax to a mass tax, gradually increasing its reach and complexity. The exemption level was initially high, affecting only a small fraction of the population (10:04).

World War II and the Expansion of Taxation
World War II was a pivotal moment for the U.S. tax system. The exemption level was drastically lowered, expanding the tax base from 7.7 million to nearly 50 million returns filed by 1945 (12:03). Kurt Kohlsted highlights this period as the point where income tax became a cornerstone of federal revenue, embedding itself into the American consciousness as a patriotic duty (12:18).

Behavioral Influence through Tax Codes
Post-World War II, policymakers increasingly used the tax code to influence social behaviors. Examples include tax credits for retirement savings, incentives for energy-efficient vehicles, and deductions for historic renovations (16:01). Kurt Kohlsted compares this to historical examples like Peter the Great’s beard tax in Russia, illustrating how taxes can shape societal norms and personal choices in unexpected ways (16:26).

Complexity and Fairness in the Tax System

The Quest for Fairness
Roman Mars discusses the inherent tension between simplicity and fairness in tax systems. Kurt Kohlsted explains that attempts to make the tax system fairer—through progressive rates, deductions, and credits—have inevitably led to increased complexity (17:29). He advocates for a simpler system, suggesting that fine-tuning for fairness often backfires by creating a labyrinthine code.

Impact on Tax Filing
Joel Slemrod notes that the complexity of the U.S. tax code has made filing taxes a daunting task for many Americans, with the Form 1040 ballooning from four pages in 1913 to over 100 pages in 2025 (19:36). This complexity not only frustrates taxpayers but also fosters dependency on tax software and professionals, further entrenching the system’s convoluted nature.

Comparative Perspectives
Vivian Le and Joel Slemrod point out that many other countries manage to maintain complex tax codes while simplifying the filing process for their citizens. Systems like "return-free filing," used in countries like the U.K. and Denmark, pre-populate tax returns using employer and bank data, allowing taxpayers to simply review and confirm their returns (20:03). The U.S. has made strides with tools like the IRS Direct File Tool, but resistance from tax software companies and political opposition hinder broader adoption (21:33).

Recent Developments and the Future of Tax Filing

IRS Direct File Tool
Introduced in 2024, the IRS Direct File Tool allows eligible taxpayers in select states to file their returns electronically for free without commercial tax prep software (23:10). This initiative received positive feedback, with 86% of respondents reporting increased trust in the IRS. However, ongoing layoffs and political opposition threaten its sustainability (23:53).

Challenges Ahead
Despite the potential benefits of simplifying tax filing, vested interests from tax software companies like Intuit have lobbied against such changes to protect their profits (22:26). The episode underscores the enduring struggle to balance a complex economy with a user-friendly tax system, leaving the future of tax filing in the U.S. uncertain.

Architectural Impact of Taxation

Taxation Shaping Buildings
In a fascinating segment, Vivian Le explores how taxation has historically influenced architectural designs. She cites the British brick tax of 1784, which led brickmakers to produce larger bricks to minimize tax per unit. This resulted in distinct architectural features where buildings from different tax periods exhibit varying brick sizes (28:02).

The Per Window Tax and Its Legacy
Further illustrating taxation’s architectural influence, Vivian describes the per window tax in Britain. To avoid higher taxes, property owners often bricked up less important windows, a practice still visible in some buildings today (30:28). This example highlights how taxes can leave lasting physical marks on the urban landscape.

Amsterdam’s Canal Houses
Vivian also discusses Amsterdam’s iconic canal houses, which were designed to maximize space while minimizing tax liabilities. By taxing the width of a building's façade, architects were incentivized to create narrow yet deep structures, adorned with hoist and pulley systems to move heavy goods into upper floors (31:12). These design choices have become defining features of Amsterdam’s architectural heritage (32:09).

Conclusion: The Endless Evolution of Taxation and Design

Roman Mars wraps up the episode by reflecting on the intertwined evolution of taxation and design. He emphasizes that while the U.S. tax code continues to grow in complexity, informed discussions and innovative tools like the IRS Direct File Tool offer hope for a more streamlined future. However, entrenched interests and political challenges remain significant hurdles.

Kurt Kohlsted and Joel Slemrod underscore the importance of ongoing efforts to balance fairness, simplicity, and functionality in the tax system. As the episode concludes, Mars hints at future discussions on how taxes have shaped the world’s buildings, promising an Architectural Digest tour with Kurt Kohlsted.

Notable Quotes

• Joel Slemrod (03:02): "History has shown that tax codes can reveal so much about a society. And if you're an American, the revelation is that filing our income taxes sucks."

• Kurt Kohlsted (07:16): "Excise taxes are regressive, meaning they place a higher burden on lower income individuals."

• Joel Slemrod (09:32): "The 16th amendment basically says the federal government has the right to levy an income tax, even though the revenues collected would not be proportional to population."

• Kurt Kohlsted (16:26): "Peter the Great... taxed beards to influence social norms."

• Vivian Le (28:02): "Tax code can leave incredible marks on buildings that last for centuries."

Further Listening and Resources

• Books Mentioned:

  • Rebellion, Rascals and Revenue Tax Follies and Wisdom through the Ages by Joel Slemrod
  • 99% Invisible City by Kurt Kohlsted and Roman Mars

• Web Resources:

  • 99% Invisible Official Website: 99percentinvisible.org
  • IRS Direct File Tool Information

• Upcoming Topics:

  • Architectural Digest tour on how taxes have shaped global architecture.

Produced by: Vivian Le
Edited by: Delaney Hall
Mixed by: Martin Gonzalez
Music by: Swan Real
Fact-Checking: Graham Ha
Awards: Nominated for three Webby Awards in Best Arts and Culture Podcast, Best Arts and Culture Episode, and Best Limited Series categories.

This episode of "99% Invisible" provides a comprehensive exploration of the U.S. tax system's history, its profound complexity, and its unexpected influence on architectural design. Through engaging narratives and expert insights, Roman Mars and his guests shed light on why filing taxes remains a contentious and intricate aspect of American life.