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Trivia Tidbit Of The Day: Part 274 -- Our Complex Tax Code

These Costs Aren't Chump Change-

Because the tax code has gotten so complex, the cost of complying has become ridiculous:

In the last century the cost of tax compliance has grown tremendously. This is due partly to the inherent difficulty of taxing income, but also because of growing non-economic demands lawmakers place on the tax code. As Congress debates the tax reform recommendations of the President’s Advisory Panel on Federal Tax Reform, Members should address this growing compliance burden, and work to reduce it through tax simplification and reform.

In 2005 individuals, businesses and nonprofits will spend an estimated 6 billion hours complying with the federal income tax code, with an estimated compliance cost of over $265.1 billion. This amounts to imposing a 22-cent tax compliance surcharge for every dollar the income tax system collects. Projections show that by 2015 the compliance cost will grow to $482.7 billion.

The costs are growing because of the necessity of tax planning, the inevitability of audits and lawsuits, and the complication of tax preparation:

Interestingly, these costs represent a fairly high percentage of taxes collected by the federal government:

Imagine a simple tax code. With lower, flatter rates. Not as much rigamarole. Simple. Straightforward. No H&R Block or Turbo Tax necessary. Why not?

Source:

The Tax Foundation (.pdf).

Previous Trivia Tidbit: Our Congressional Districts Are Getting Huginormongous.

Posted by Will Franklin · 20 February 2006 11:54 AM

Comments

Posted by: Ken McCracken at February 20, 2006 12:35 PM

Posted by: Zsa Zsa at February 20, 2006 02:58 PM

Posted by: Zsa Zsa at February 20, 2006 09:03 PM