The high cost of the time tax
The time tax refers to the many hours that people spend doing paperwork or other tasks just to receive government services and supports. At its worst, the time tax can be regressive, wasteful, and ineffective. Despite this, the time tax often flies under the radar. We think it deserves more attention. This is the third article in our series on the time tax, the harms it causes, and how it might be fixed.
Sure, no one likes doing paperwork, but how much damage could it really cause? Couldn’t this time tax framing just be a bit of an overblown protest from people with an administration allergy?
Administrative burdens might seem like a minor annoyance but added together they can be a major drag on people’s lives, on productivity, and on the effectiveness of public services.
We are lighting time and money on fire
Unnecessary administrative requirements create huge opportunity costs; they swallow huge amounts of people’s time. One estimate suggests that paperwork burdens in the US are comparable, in dollar terms, to the size of the corporate income tax. It’s paid in the form of opportunity cost: in time spent not working, studying, caring for family, or caring for oneself.
The time tax isn’t only faced by individuals, service providers and administrators face it too. Time taxes require extra oversight and staff time, meaning that a lot of people who would otherwise be providing services must instead act as service navigators. For example, the CFIB estimates that doctors spend the time equivalent of 5.5 million patient visits on “unnecessary paperwork and administrative tasks” each year. Government staff often complain about spending an inordinate amount of time and energy navigating bureaucracy rather than developing programs or administering services. These are people in public or community service who want to be helping others, not pushing papers.
Time taxes are typically shouldered by the people who can least afford it
When it comes to navigating bureaucratic hurdles, we ask most of those who are least positioned to manage it. This leaves a real human cost. We often turn to public services at moments of crisis in our life — when we lose our incomes, when our lives are upended by a natural disaster, when a family member faces a health emergency. But at these times of crisis, the very programs designed to serve as on-ramps often end up acting as moats instead.
Those who need government services the most usually have the greatest difficulty navigating the barriers gatekeeping them. In 2022, the Office of the Auditor General found that the Canada Revenue Agency and Employment and Social Development Canada had “not done enough to help hard-to-reach populations connect with the benefits put in place to support low-income Canadians.” In particular, low-income Canadians are less likely to know about crucial supports from which they could benefit (including things like the Canada Child Benefit, the Canada Workers Benefit, the Guaranteed Income Supplement, and the Canada Learning Bond).
As Code for America founder and former Obama administration deputy Chief Technology Officer puts it “paperwork favours the powerful.” Those with the most resources are most likely to make it through — which is exactly the wrong outcome for safety net programs designed to reach people in need.
Administrative burdens make programs less effective
As a result of these obstacles, people systematically miss out on programs and services that are meant to serve them. For example, only about 40% of people eligible for Canada’s Disability Tax Credit actually receive it, in large part because the application for it is so onerous. And people with low incomes disproportionately face challenges filing taxes, meaning that they may miss out on the very benefits that were designed for them.
The combined effects of these burdens can be life changing — and not in a good way. Take this example highlighted by Amanda Kaplan and Kelli Garcia from the Ideas42 Policy Lab:
A few weeks before 4-year-old Paul Peterson was scheduled to have surgery to close a hole in his stomach as part of his recovery from a stroke, he was dropped from Medicaid coverage. While his mother frantically worked to figure out what happened and get him re-enrolled, his surgery was delayed and he missed needed speech, occupational, and physical therapy appointments. Paul, like many others, lost coverage not because he wasn’t eligible but because of bureaucratic hurdles: burdensome paperwork, complex regulations, and changing deadlines.
Whether because of implementation failures, targeted restrictions, or prioritizing program integrity (money only goes to the intended recipients) over program effectiveness (money achieves the intended outcomes), time taxes make it less likely that our public policies actually work.
Administrative burdens decrease trust in government
If time-consuming paperwork is people’s primary association with government services, it’s easy to see how government’s reputation could be on the line. Research suggests that disappointing experiences with public agencies can lead to decreasing trust in government. And governments can’t afford this, particularly given how much trust in government institutions has fallen in recent years. As an executive order to reduce administrative burdens in the US highlighted, “by demonstrating that its processes are effective and efficient, in addition to being fair, protective of privacy interests, and transparent, the Federal Government can build public trust.” Cass Sunstein lays out the stakes in his book Sludge: “It makes people feel that their time does not matter. In extreme cases, it makes people feel that their lives do not matter.”
This much is clear: time taxes hurt citizens, service providers, and government. Coming up in our series, we’ll look closer at some case studies and some approaches to deal with the challenge.
By Khiran O’Neill
