The Design of the Tax System The notorious 1920s gangster and crime boss was never convicted for his many violent crimes. Yet eventually he did go to jail for tax evasion. He had neglected to heed Ben Franklin’s observation that in this world nothing is certain but death and taxes. When Franklin made this claim in 1989 the average American paid less than 5 percent of his income in taxes and that remained true for the next hundred years. Over the course of the 20 th century however taxes became ever more important in the life of the typical U.S. citizen. Today all taxes taken together including personal income taxes corporate income taxes payroll taxes sales taxes and property taxes use up about a third of the average American’s income. In many European countries the tax bite is even larger. Taxes are inevitable because we as citizens expect the government to provide us with various goods and services. The government can...