SUNDAY BLOG:
I found this on Newsmax.com and thought I'd pass it along. The costs of compliance with our complicated federal tax laws as all of us file our 2011 federal income tax is rarely mentioned. All we hear is who isn't paying his or her fair share....while those in Washington, D.C., burn through money like drunken sailors and drive our nation further and further in debt......how about the value of our time?
The National Taxpayers Union reports that Americans spend some 7.6 billion hours a year complying with the tax code — the equivalent of 3.8 million full-time employees working all year long just on tax compliance. If those workers were paid the average rate for a civilian employee, the total cost would be more than $227 billion.
Americans also pay $35 billion out of pocket for assistance in filing their taxes, with the average non-business individual filer spending $160 on tax assistance — professional help, software or other services, according to the Independent Women’s Forum (IWF), a nonpartisan research and educational institution.
In 1980, 38 percent of Americans used a paid preparer to handle their tax forms. In 2007, the most recent year with available data, nearly 59 percent used paid assistance.
Tax compliance weighs heavily on corporations as well. The National Taxpayers Union estimated that in 2009 compliance expenses alone would cost U.S. corporations $159 billion.
“That’s around half of what those companies had to pay in taxes, a startling statistic, attesting to the corporate tax code’s incredible inefficiency,” says IWF Managing Director Carrie Lukas. “Think about it: For every dollar the government raised in revenue from corporations, companies had to pay out $1.50.”
Companies pass on compliance costs to consumers, of course, by charging higher prices on goods and services.
Corporations lose time and money not just by complying with tax laws, but also by working to minimize their tax payments. That money could be used instead to hire workers and expand production, stimulating the economy instead of retarding growth.
Don C. Brunell, President
P.S. I wonder what the total cost would be if someone could figure out the value of our time spent figuring out our state and local taxes?
