NCPA - National Center for Policy Analysis


April 13, 2007

Americans are natural procrastinators when it comes to unpleasant tasks, so it should be no surprise that surveys show half of all tax filers wait until this last week before the April 16 deadline to do their taxes.  No wonder: This year there are a record 66,000 pages of mostly incomprehensible tax laws to comply with, and for those with really complicated returns, 526 separate forms that may need to be filled out, says Stephen Moore, a senior economics writer for the Wall Street Journal.

In 2005 an astonishing six out of every 10 taxpayers needed the help of a trained professional to complete their returns.  Tax preparation is now one of America's fastest growth industries.

  • A Cato Institute study finds that 1.2 million workers are employed as tax accountants, lawyers and H&R Block employees.
  • Even so, to make sense of their taxes American workers and businesses devote 6.4 billion hours a year, about 45 hours per return.
  • There are now 16 separate tax breaks for college education and several dozen for energy conservation, including write-offs for such things as purchasing electricity-saving refrigerators.
  • About two-thirds of Americans say they can't figure out basic IRS regulations or the tax laws on the sale of a home.
  • Yet Congress says that it has passed 22 laws to "simplify the tax code" over the past 40 years.

The complexity of the tax code, the cost it imposes on the economy simply to comply with it, and the civilian army of agents needed to enforce it continues to grow like cancer cells attacking the healthy ones, says Moore.

At the same time, common sense reforms like the flat tax or the national sales tax remain politically stalled -- perhaps because there are so many vested interests in keeping the tax code complicated, says Moore.

Source: Stephen Moore, "Those April Blues," Wall Street Journal, April 13, 2007.

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