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It's Tax Week! Fast Facts on Tax Complexity


Nan Swift
April 15, 2013

Every year, National Taxpayers Union (NTU) analyzes the latest data on the rising specter of tax complexity. Here are some of the highlights of this year’s study, which you can read HERE.

This week, we’ll “celebrate” Tax Week on our blog and social media presence with some informative, and fun (at least as fun as taxes can get), graphics, facts, and more. Head over to Facebook and Twitter and help share some of our messages highlighting this critical challenge, or, if you’re feeling the pain of tax complexity right now, tell Congress to “Scrap the Code” at our Take Action page.

Here are the ‘low-lights’ of this year’s edition of “A Taxing Trend: The Rise in Complexity, Forms, and Paperwork Burdens.”

Tax Compliance

  • The total paperwork time burden imposed by the Treasury – almost all of it due to tax compliance – totals an astounding 6.7 billion hours for the most recent year available. That is the equivalent of about 3.35 million employees working 40-hour weeks year-round with just two weeks off.
    • It is also more than the number of workers at the four biggest retailers in the Fortune 500 – Wal-Mart Stores, McDonald’s, Target, and Kroger – combined.
    • More than double the number of elementary school teachers and ten times the number of mail carriers.
  • Individuals spend a combined $34.1 billion a year on tax software and other out-of-pocket costs.
  • When calculated at the average hourly wage, the value of the labor involved in 6.7 billion hours is a jaw-dropping $206.6 billion. The total compliance cost is $240.8 billion a year; for individuals alone it is $116.8 billion.
  • The most recently published Tax Code had 3,951,104 words, an increase of more than 112,000 words from February 2010. This is seven times the length of Leo Tolstoy’s War and Peace. Or, more than two times the length of the King James Bible and the entire works of Shakespeare combined (3,345,402 words).
  • To help provide additional detail, there are 20 volumes of regulations spanning 14,000 pages with 10.48 million words. The law and regulations top 14.4 million words in all.
  • Seventy-five years ago, the Form 1040 instructions were just two pages long. Today, taxpayers must wade through 214 pages of instructions; quadruple the number in 1985, the year before taxes were “simplified.”
  • Paid preparers and tax preparation software accounts for 90 percent of returns – a telltale sign of tax complexity problems.

Putting the Burden in Perspective

Using the total personal & corporate income tax compliance time burden in hours, broken down by the number of total U.S. workers, here are a few things Americans could do if they did not have such a burdensome tax code!

  • Watch the entire Harry Potter movie series, twice (and still have time for the two Hunger Games movies) (approx. 45 hrs.). Or watch all six Star Wars movies, THREE times (45 hrs.)
  • Lose weight: if this time was spent in spinning class, the average American man and woman could lose 14 and 11.8 pounds respectively.
  • Fly between Hong Kong and New York 3 times (48 hrs.)
  • Achieve minimum flying time for a commercial pilot’s license in 5 tax seasons (250 hrs.)

What could we buy if we had the $241 billion burden back in the form of cash?

  • We could buy 66 BILLION Starbucks Lattes or…
  • 482 MILLION iPads! Enough for everyone in the U.S., Mexico, and Canada (approx. 461 million), or…
  • Build 78 new Tappan Zee Bridges!

iojafd


 

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