Tax Compliance: A Heaping Pile of Waste
6.1 billion man-hours. That’s approximately the amount of time consumed by 3 million full-time workers over the course of a year. 6.1 billion hours also happens to be the amount of time eaten up by tax compliance each year, and that figure doesn’t even include the additional hours that taxpayers and businesses spend responding to IRS notices and audits.
$163 billion dollars. That’s the approximate cost in actual dollars (the figure doesn’t include the opportunity cost of the 6.1 billion hours) that American taxpayers and businesses spend each year on the process of filing their taxes. According to the Taxpayer Advocate Service (whence these other facts and figures come), $163 billion is about 11 percent of aggregate income tax receipts. Or another perverse way of looking at this $163 billion is as a tax on taxation.
4,428. That’s the number of changes to the tax code in the past ten years (TAS estimates an average of over one change per day). 579 of those changes happened in 2010 alone.
3.8 million words. Here’s a scary thought: No one knows exactly how long the tax code actually is, but according to TAS’s best estimate, it includes about 3.8 million words.
6.1 billion man-hours + $163 billion dollars + 1 change to the tax code per day + 3.8 million words equals one enormous pile of waste and inefficiency.
But don’t look at it in such a negative light, urges Caterine Rampell at the New York Times, because inefficiency isn’t bad for everyone.
Much of that $258 spent annually by the typical taxpayer to comply with the tax code ends up as a salary for a tax preparer (or some tax preparation software-coder’s). As my father — one of the many accountants in my lineage — likes to say, he is always grateful that Congress has chosen to take pity on the nation’s poor accountants by guaranteeing them employment for life.
In other words, in tax preparation as in so many other industries, businesses and their employees can benefit from government-instigated inefficiencies.
You, ma'am, had best get your finger out of my eye.
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Comments:
May '10
Re: Tax Compliance: A Heaping Pile of Waste
"Be thankful I don't take it all."
Re: Tax Compliance: A Heaping Pile of Waste
Aaron Miller: "Be thankful I don't take it all." · Jan 19 at 12:23pm
I'm partial to the original.
Sep '10
Re: Tax Compliance: A Heaping Pile of Waste
What was not mentioned were the millions of hours spent evading taxes which are growing exponentially as this farcical system becomes more ridiculous with each passing year.
Nov '10
Re: Tax Compliance: A Heaping Pile of Waste
I am frankly impressed. Ms. Rampell's article is the verbal equivalent of executing a triple back flip and landing with your head squarely up your rectum. And she managed to hoodwink The New York Times out of a paycheck at the same time! Breathtaking.
May '10
Re: Tax Compliance: A Heaping Pile of Waste
Diane Ellis, Ed.
Aaron Miller: "Be thankful I don't take it all." · Jan 19 at 12:23pm
I'm partial to the original. · Jan 19 at 12:37pm
If only the Beatles' vocals could be combined with Vaughn's guitar. I'd do it myself, but the old version doesn't have Stevie's swing.
Thanks, though. I had never heard the original.
Aug '10
Re: Tax Compliance: A Heaping Pile of Waste
If the GOP had any media sense, they could be making great use of these numbers.
Oct '10
Re: Tax Compliance: A Heaping Pile of Waste
We will not get tax simplification from career politicians. The current tax code is too valuable to them as a means of legally extorting campaign contributions. They change some obscure clause buried within those 3.8M words, a special interest is enriched and all too happy to donate some of it back. As Michael Kinsley famously said, "The scandal isn't what's illegal; it's what's legal.”
Dec '10
Re: Tax Compliance: A Heaping Pile of Waste
[ sullenly erects barriers to thrown Slurpees, hob-nailed boots, high-heeled shoes, accountant's green eye shades]
Fair Tax!
May '10
Re: Tax Compliance: A Heaping Pile of Waste
The American tax code is simultaneously an affront to democracy and a logical consequence of it.