Tuesday, April 27, 2010

Simplification of the Tax Code

While Tea Party activists have gotten lots of media coverage as they voiced their dismay over government spending and taxes, another group, the Office of the Taxpayer Advocate, worried over taxes headed by Nina Olson has remained relatively silent.

Implemented by Congress in 1996, this watchdog service has sought to simplify the tax code. An article in the Economist last week highlights their unheard plight. I found these statistics shocking:

“Americans now spend 7.6 billion hours a year grappling with an incomprehensible tangle of deductions, loopholes and arcane reporting requirements. That is the equivalent of 3.8 million skilled workers toiling full-time, year-round, just to handle the paperwork. By this measure the tax-compliance industry is six times larger than car-making.”

Think of all of this wasted time! This would be the equivalent of the entire nation of Palestine working only on American tax forms (assuming they are all skilled laborers).

The process is so convoluted and complex, that 82% of Americans pay for help, whether through a tax software program or accountant. I understand that additions are made to the tax code for a certain special interest group, but there must be some sort of way to filter the ever growing provisions to the tax code. The bureaucratic goals are far-reaching and thorough, and groups like the IRS rely solely on citizen response to their inquisitions.

There are loud talks of high unemployment, the levels of government spending, and tax rates, but I think there need to be stronger talks of decreasing American citizens extraneous work for the government, and then having to pay for it.

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