NCPA - National Center for Policy Analysis

Complex Tax Code is Costly

December 4, 2002

The U.S. tax code is so inexcusably complex that it encourages cheating and costs the government dearly in revenues, analysts report.

  • Running close to six million words, the tax code is seven times longer than the Bible.
  • The Internal Revenue Service estimates that such complexity is forcing Americans to spend $80 billion per year simply to comply with tax laws.
  • A University of Michigan study puts the cost of enforcing and complying with federal personal and corporate income taxes at around $115 billion per year.
  • The federal government has accumulated such a huge backlog of uncollected tax debts that the IRS is considering hiring private bill collectors to help track down the missing funds -- a move which would only add to enforcement costs.

Experts pronounce the present tax system "beyond repair." They would like to see it scrapped and replaced with a flat tax -- the simpler, the better.

The suggestion is far from outlandish. Russia already has a flat tax in place -- at a rate of 13 percent. Since it adopted the flat tax two years ago, inflation-adjusted tax revenues have jumped by nearly 30 percent.

Source: Edwin Feulner (Heritage Foundation), "Shelter from the Storm," Washington Times, December 4, 2002.


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