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Tax Law's Complexity Continues to Snare Filers, Study Finds
For Immediate Release April 14, 2005
(Alexandria, VA) – The President's panel on federal tax reform will need to make a long list of recommendations for simplifying the nation's tax laws, according to an annual study of tax complexity conducted by the non-partisan National Taxpayers Union (NTU).
"Massive paperwork burdens and heavy reliance on outside assistance are just two signs that Americans are straining under a tax system whose weight is becoming too difficult to bear," said NTU Senior Counselor and study author David Keating. "To many Americans, tax-filing season feels more like open season on their time as well as their money."
The NTU study is the seventh major examination of Tax Code complexity the group has conducted since 1999, and thus provides a unique evaluation of how the income tax system has confronted citizens with new challenges year after year. Among the findings:
Keating said that complexity is "likely to get worse before it gets better," because of the increased number of citizens who will be trapped by the Alternative Minimum Tax (AMT), a parallel tax system once aimed at ensuring the wealthy paid a substantial tax bill. By 2010, nearly 35 million taxpayers could be forced to fill out a second tax return for (and pay) the AMT. The basic AMT form is 55 lines long, with an estimated completion time of 3 hours, 53 minutes.
"Unless the tax laws are made simpler and more transparent, America risks losing its competitive economic standing in the world," Keating concluded. "Our nation's economy, civil society, and political environment would all flourish under fundamental tax reform."
NTU is a non-profit, non-partisan citizen organization founded in 1969 to work for lower taxes and smaller government at all levels. Note: NTU Policy Paper 116, A Taxing Trend: The Rise in Complexity, Forms, and Paperwork Burdens, is available online at www.ntu.org.