Recently, my NTUF colleague Demian Brady had a great piece in the USA Today where he calculated that the now-passed Tax Cuts and Jobs Act (TCJA) will save taxpayers 210 million hours and $13 billion in compliance costs. Because 30 million people will no longer have to endure the frustration of itemizing, they can reclaim the time and out-of-pocket expenses they used to suffer at the hands of the tax code.
$13 billion sounds like a lot of money, but it’s hard to contextualize exactly what it means so I thought I’d dig up some numbers to help explain.
$13 billion is more than the net profits of all but the 14 most profitable companies in the world. That’s more than the profit earned by businesses like AT&T, Intel, Facebook, and General Electric. It’s more than the profits of Coca Cola and Pepsi combined. It’s more than the profits of Visa and Morgan Stanley combined.
$13 billion is more than the value of the Star Wars franchise. Arguably the most famous movie franchise in the world had grossed “only” $7.5 billion in theaters before the release of “The Last Jedi.” The franchise was purchased by Disney for $4 billion back in 2012.
$13 billion is more than the entire budget request for several federal agencies. The amount of time and money TCJA will free up in tax compliance simply by reducing the need to itemize is larger than the President’s budget request for the Department of Labor, the Department of the Interior, the Department of Treasury, and is nearly as much as the Environmental Protection Agency and Department of Commerce combined.
$13 billion is just slightly less than we spend on Super Bowl parties. According to the National Retail Federation (NRF), Americans spent roughly $14.1 billion on food, decorations, apparel, and other expenditures related to the big game.
$13 billion is nearly 1.5 times what we spend on Halloween. Spending on costumes, candy, and decorations for Halloween was about $9.1 billion, again according to NRF.
$13 billion is about twice what we spent on everything related to the 2016 federal election. Direct expenditures, including things like donations to candidates and ad purchases, related to the 2016 elections in Congress and for the Presidency totaled about $6.5 billion.
$13 billion is more than 2.5 times as much as Americans spent on “Black Friday.” Data from Adobe Insights estimated that Americans spent about $5 billion on so-called “Black Friday,” the day after Thanksgiving that has become a consumer spending extravaganza.
While some have derided TCJA as a bill that doesn’t do enough to simplify the tax code, the reality is that it will free millions of Americans from the burdens of slogging through endless tax paperwork. That’s valuable time and out-of-pocket money that can be devoted to productive economic activity, rather than being spent complying with inscrutable tax rules. Some have joked that this is Congress’ and the President’s Christmas present to America this year, but the simplicity inherent in the bill is a gift that keeps on giving year after year as well.