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Nation’s Oldest Taxpayer Group: U.S. Tax Complexity Is Civil Liberties Crisis, Costs Americans Billions in Lost Dollars & Hours
For Immediate Release April 17, 2012
Douglas Kellogg, (703) 683-5700
Pete Sepp, (703) 683-5700
(Alexandria, VA) – Our complex tax system continues to be one of the most expensive in the world, costing the American economy $228.4 billion and 6.38 billion hours per year; combined with recent Congressional legislation, it threatens to become a full-blown civil liberty crisis where no personal financial detail is your own, according to the 362,000-member National Taxpayer’s Union’s (NTU’s) 14th annual study of tax complexity.
If federal tax-law compliance were an occupation, it would now be the third-largest job in the nation – right behind cashiers but ahead of office clerks. The 6.38 billion hours spent this year to navigate our massive tax code is the equivalent of about 3.19 million employees working 40-hour weeks year-round with just two weeks off. That is nearly the number of workers employed by Wal-Mart, McDonald’s, Target, and Kroger combined!
“For struggling Americans seeking job creation, Washington’s idea of putting us all to work complying with its byzantine tax code is probably not what they had in mind,” said NTU Senior Counselor and study author David Keating. “NTU’s Taxing Trend Report shows a tax code whose complexity continues to cripple our economy even as more regulations and less privacy are already on the way.”
NTU has conducted comprehensive examinations of Tax Code complexity since 1999, highlighting historical trends in the compliance burden the IRS places on Americans. NTU’s findings include:
NTU’s “Taxing Trend” Policy Paper also examined the Tax Code’s detrimental impact on the U.S.’s business position in the world. This year the U.S. maintained a dismal rank of 66th worldwide (out of 183 countries surveyed) for hours spent on tax compliance by a typical smaller corporation (based on a joint study published by PricewaterhouseCoopers and the World Bank Group). The U.S.’s rank for total tax rate declined further, to 131st out of 183, a downward slide of 7 spots.
Keating warned that financial privacy and taxpayers’ civil liberties are on perilous footing saying, “Every detail of a taxpayer’s private financial life is open for government inspection; mixing the extraordinary powers given to the IRS with new laws is a recipe for a civil liberty catastrophe.” For example, the Patient Protection and Affordable Care Act will force new compliance requirements on small businesses in particular and empowers the IRS to enforce the individual mandate. Legislation like the Foreign Account Tax Compliance Act drives away international investment and places undue burdens on Americans working abroad.
Keating concluded: “For the sake of recovering our nation’s prosperity, competitiveness, and protecting the rights of citizens, tax simplification is imperative.”
NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: NTU Policy Paper 130, A Taxing Trend: The Rise in Complexity, Forms, and Paperwork Burdens, is available online and in PDF format at www.ntu.org.