Wednesday, April 15, 2009

Tax Day!

Here we are on April 15th. Most taxpayers do not enjoy this day, because those taxes are due! The deadline, as well as the filing process, reminds me again of the complexity of our tax code. That complexity surely costs us a great deal of money. Experts refer to these expenditures as the "costs of tax compliance." How large are these costs for Americans? Here is an excerpt from the Tax Foundation's website:

The full cost a tax system is more than the amount of tax paid. It also includes the cost of tax planning and paperwork. Economists call these "tax compliance" costs, and the IRS estimates Americans spend 6.6 billion hours per year filling out tax forms—including 1.6 billion hours on the 1040 form alone. In 2002 Americans spent roughly $194 billion dollars on tax compliance. That amounts to 20 cents of compliance cost for every dollar collected by the tax system.

2 comments:

Amy said...

I am surprised that there are no comments on your "tax Day" posting.
The 194 billion dollars sure take up a chunk of the constituents capital. And at that rate, I would wager that the less financially secure folk are losing when they can't hire the best talent for preparing their taxes.
The only fair system would be a flat tax. But good luck, the receivers of the 194 Billion Dollars are going lobby hard against that change!

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