May 28, 2013

MONEY FOR NOTHIN':

The Hidden Costs of Tax Compliance (Jason J. Fichtner, Jacob Feldman | May 20, 2013)


Americans spend an estimated between $67 billion and $378 billion annually in accounting costs related to filing taxes. Americans spent more than 6 billion hours (2011) complying with the tax code. This represents an annual workforce of 3.4 million--a population that could be the third largest city in the United States, surpassing Chicago (2,707,120), Houston (2,145,146), and Philadelphia (1,536,471), and larger than the population of 21 states. A workforce equivalent to that employed by the four largest US companies--Walmart, IBM, McDonald's and Target--combined.

Economic Costs

The impact of taxes on the economy extends beyond the revenue taken by the government. The compliance burden results in estimates of foregone economic growth from $148 billion to $609 billion annually.

Lobbying Costs

While an estimate for tax lobbying specifically, is not available, lobbyists spent nearly $28 billion petitioning federal, state, and local governments for policy preferences between 2002 and 2011.

Lost Revenue

The United States has a tax-reporting compliance rate of 85.5 percent--leaving a 2012 revenue gap of $452 billion in unreported taxes, some of which is can be attributed to complexities in the tax code.



Posted by at May 28, 2013 7:27 PM
  

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