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Contact:
Foundation for Economic Growth,
P.O. Box 10-282,
Wellington, N.Z.
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Income Tax - Now Too Complex?
By Bob Bauman
Aug 27, 2004, 10:40

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* By government's own estimates it takes an average US taxpayer 28 hours and 30 minutes to complete a 1040 tax return -- 42 minutes longer than last year. 60% of all taxpayers need paid professional help in order to file their taxes.

* Individuals and businesses spend 5 billion hours annually complying with the income tax; with estimated compliance costs of over $200 billion, more than it costs to produce every US car, truck and van.

* When the first national income tax became law in 1913, the entire Internal Revenue Code fit into 173 pages. Today, the IRC contains over 60,000 pages. There are nearly 500 IRS forms, each with many pages of fine print instructions.

* The IRS publishes and distributes over 8 billion pages of forms and notices each year which, laid end to end, would circle the Earth 28 times.

* The tax code is so complex even the IRS can't figure it out. A US Treasury investigation found that IRS employees gave the wrong answer about 50% of the time in response to taxpayers' questions. Flip a coin!

* The General Accounting Office reported that in auditing 45 random IRS transactions, 16 were properly calculated and 29 were wrong, an error rate of 64%! (GAO Pub. 94-120)

* The administrative costs of the bloated 114,000 employee IRS bureaucracy alone exceeds $10 billion a year. That number is five times the number of FBI agents and twice as many as CIA employees.

* In 2000, individual income taxes consumed 10.2% of the entire US GDP.

I think the New Zealand IRD has a much better strategy. Take the money before the punter sees it and then don't offer any receipt or acknowledgement. Don't bother applying for refunds - it is much easier just to let sleeping dogs lie.


© Copyright; Foundation for Economic Growth and various authors. Individual authors retain their own copyright.

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