The Tax Code Is Too Complicated
Alex Adrianson /
U.S. taxpayers will spend $431 billion just complying with the tax code this year, according a new study by Arthur Laffer, Wayne Winegarden, and John Childs. That’s not money collected by the Internal Revenue Service; that figure represents just the value of the time taxpayers will spend keeping records and filling out tax forms, and the cost of paying professional tax preparers to do it for them, plus the cost of the bureaucracy needed to administer the tax code. That $431 billion amounts to 30 percent of the total of income taxes collected.
Why does it cost so much to comply with tax laws? For starters, the tax code is long. It contains 3.8 million words as of 2010. And the task of figuring it out is all the more impossible because the law is constantly changing. In 2001, the tax code contained “only” 1.4 million words, but since then there have been approximately 4,428 changes to the tax laws. (more…)