Today, National Taxpayers Union Foundation (NTUF) released the next installment in its ongoing annual study of tax complexity in the United States. According to the research conducted by NTUF’s Director, Demian Brady, the findings are grim, underscoring the urgent need for tax reform. Taxpayers spent an average of 6.1 billion hours in complying with current individual and corporate tax filing requirements. Between the value of this time, and the money Americans shelled out on supplies, overhead, software, and tax preparation fees, NTUF estimates that the federal tax system imposes over $234 billion in compliance costs alone. And billions more hours of time burdens, along with higher costs, may soon be on the way.
Brady stated, “A fair and sound tax system should be based on five basic principles: simplicity, transparency, predictability, responsiveness, and efficiency. Our findings show that the current Tax Code gets failing grades on these points, and taxpayers suffer the consequences throughout the year, not just on Tax Day. Comprehensive tax reform is urgently needed.”
“In an age where the Internet, computer software, and smartphones have made just about every chore easier, our study shows that complying with the federal tax laws remains a massive drain on the time, energy, and finances of American families and businesses. It doesn't have to be this way,” NTU President Pete Sepp said. “For the sake of our economy at home, our competitiveness abroad, and our rights as citizens wherever we choose to live, Congress and the President must begin simplifying the tax system now.”
While the numbers are hard to grasp, one thing is definitely clear: tax reform needs to happen this year. Taxpayers are tired. You can read the complete policy paper here.