NCPA - National Center for Policy Analysis


August 2, 2006

If Washington were truly interested in knowing why Americans cheat or try to avoid taxes, it wouldn't have to look any further than the more than 65,000 pages that make up the federal tax code and the 582 tax forms, says Investor's Business Daily (IBD).

  • The tax code is a patchwork of needless complexity, filled with loopholes, exceptions and rules that confound the Internal Revenue Service's own agents, who give out the wrong information about half the time when taxpayers call with questions.
  • More than six in 10 U.S. taxpayers use professional help to prepare their returns; they spent $265 billion in 2005 just to comply with the filing process -- yet Money Magazine reports that there's a 99 percent chance that professionally-prepared returns are not fully correct.
  • Because of the tax code's complexity, 40 percent of Americans, a figure provided by the IRS, simply don't bother to comply with the tax code; the rest of us probably err on the side of caution because we -- justifiably -- fear the IRS and consequently overpay.


  • In the last five tax years, an average of 69 to 70 hours a year has gone into completing and filing each 1040 form -- which has a 131-page instruction book -- along with the 1040's various schedules and work sheets; that's up about 20 percent from the mid-1990s.
  • Total hours estimated in preparing taxes, keeping records and trying to figure out the web of rules is perhaps as much as 6.5 billion a year.

What's needed is an entirely new system that is so straightforward that it can be neither misunderstood nor mangled.  Rates should be as low and as flat as possible, says IBD.

Source: Editorial, "A Code That Should Be Broken," Investor's Business Daily, August 2, 2006.


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