A new report by the Tax Revolution Institute said the federal tax code cost the economy $1 trillion dollars per year. The report says title 26 of the tax code has over 74 thousand pages. The laws come in at just over 10 million words, 2.4 million rules and another 7.7 million words to clarify those rules.
According to the study, Americans having to navigate this endless maze of tax laws spend over "8.9 Billion hours" staying in compliance with these laws. The cost of compliance is equivalent to the GDP of 36 states combined.
Also, when you add in the army of lawyers, accountants and 60,000 pages of tax case law, you see why the cost is so staggering.
The study looked at comprehensive studies published by Mercatus Center of George Mason University and updated information from the Office of Information and Regulatory Affairs to reach their $1 trillion dollar figure.
Congressmen Kevin Brady (R), Chairman of the House Ways and Means Committee, is working with other lawmakers on a fix. From a Washington Free Beacon story on the matter they said:
"In June, Chairman of the House Ways and Means Committee Kevin Brady (R., Texas) put forth the Republican’s outline for tax reform known as “A Better Way,” focusing on making the tax system more simple and fair for taxpayers.“Since President Reagan reformed the tax code in the 1980s, it has exploded in size, tripled in size, 70,000 pages—incredibly complex,” Brady said at an event at the Heritage Foundation.“For years Americans have asked why can’t we have a tax code so fair and so simple it could fit on a postcard?” he asked. “And for years Washington dismissed that idea but our tax team went to work and that’s exactly what we’re proposing.”
Public opinion on the matter shows bipartisan support for reform. A Wallet Hub poll found that 75% of people think the tax code is "too complex." In a Pew poll, 72% of Americans had "dissatisfaction with the federal tax code." A staggering Tax Foundation poll found that 82% thought the agency needed a “complete overhaul."
This new report only sheds more light on our broken tax system. Americans are sick of the watered down reforms of the past. More loopholes, carveouts, and targeted tax breaks aren't the solution going forward. Keep watching and reading as we look at the House reform measure (A Better Way) in the future. If you have time, I would look at the policy in its current form today. We won't cover it too much in this article because it is likely to change.
Courtesy of Tax Revolution Institute
Tax Revolution Institute (TRI) is a non-partisan, 501(c)(3) organization committed to promoting transparency, accountability and integrity at all levels of the U.S. tax system, while researching and developing simple and innovative tax reform solutions to advance freedom and prosperity for all Americans.
TRI Study https://taxrevolution.us/tax-code-complexity-costs-up-to-1-trillion-per-year/
Washington Free Beacon http://freebeacon.com/issues/tax-code-compliance-costs-economy-1-trillion-annually/