Excerpt Of The Day: We Desperately Need To Simplify Out Byzantine Tax Code
There isn’t a human being alive who knows what’s contained in the federal tax code. To put it in perspective: Abraham Lincoln’s Gettysburg Address, which defined the American nation, is 272 words in length. Our Declaration of Independence is some 1,300 words. The Bible, which spans several thousand years of human history, is 773,000 words. But the federal tax code, with all of its attendant rules and regulations, is 9 million words and rising.
Since 1986, when the last serious attempt at tax simplification was made, the code has been amended 14,000 times. Its length has grown by 3 million words–an avalanche of personal and business deductions, exemptions, preferences, loopholes, credits and exclusions spread out over six formal tax brackets (and an infinite number of other brackets as deductions are phased out when taxpayers reachcertain income thresholds). And then there’s the abomination known as the alternative minimum tax–an Orwellian name for a levy if ever there was one. A more accurate name would be the compulsory maximum tax.
A typical taxpayer filing the regular Form 1040 and reporting income from work, dividends and capital gains will spend an estimated 26 hours and 48 minutes each year completing his return. Seventeen years ago it took only 17 hours and 7 minutes. That’s a 57% increase in just the past 17 years.
Billions of hours of lost productivity–the equivalent of 3.3 million full-time jobs–are squandered on tax compliance. At last count, Americans spent a staggering 6.6 billion hours preparing their tax forms. — Steve Forbes