The hidden costs of our bloated tax code
President-elect Donald Trump could save U.S. taxpayers and business billions of dollars in hidden compliance costs by simplifying the nation’s bloated and incomprehensible tax code.
That’s according to information presented in a recent report from the Tax Revolution Institute.
From the report:
That is the present size of Title 26 of the U.S. Code, i.e. the “Internal Revenue Code.” One would think this would be nearly impossible for an enterprise wielding an army of tax experts to absorb, let alone the average taxpayer. However, it doesn’t stop there.
The IRS has added an additional 7.7 million words of tax regulations designed to clarify what the original 2.4 million words mean. You can’t make this stuff up. Add 60,000 pages of tax-related case law essential to accountants and tax lawyers, and the burden is revealed.
More than 10 million words with a hidden annual compliance cost of up to $1 trillion. This is what Title 26 of the U.S. code and the Federal Register is estimated to cost the United States economy each year.
The costs and confusion associated with trying to understand the increasingly complex tax law system are routinely cited in public polling data pointing to overwhelming majority support for giving the tax system a total overhaul.
This presents a massive opportunity for Trump, who has already promised a number of tax reforms and cuts. And Republicans who’ve called for tax law simplification are banking on Trump helping to make the plan a success.
Rep. Kevin Brady recently told MSNBC’s “Morning Joe” that Trump’s election provides the best opportunity Americans have seen in more than three decades for a comprehensive tax overhaul.
“We want a tax code built for growth, literally designed to grow jobs and salaries in the U.S. economy, and we want to leap-frog America back into the lead pack and keep us there, the most pro-growth places on the planet,” Brady said.
The lawmaker contends that Trump should open the door for tax reform in three major steps: Lower tax rates on businesses, implement a “postcard-style” system for filing individual taxes, and rebuilding the IRS.