Post by RS Davis on Apr 30, 2004 10:22:27 GMT -5
[glow=red,2,300]by James W. Harris[/glow]
For decades, U.S. politicians have promised to make taxpaying simpler and
less complicated.
The result? The system is more complex, more costly and more time-consuming
than ever before.
Indeed, during the past decade, federal tinkering with the Tax Code has
added an incredible *one billion extra hours* to the annual paperwork burdens
on American taxpayers, according to a comprehensive study of tax complexity
conducted by the non-partisan National Taxpayers Union (NTU).
"Federal income tax rates have often risen and fallen, but the complexity of
the tax system itself has almost always gone in one direction -- upwards,"
said study author David Keating. "Even though paying taxes is still the
biggest pain for Americans, the very process of filing taxes has become a
major headache in itself."
Among the study's findings:
* It now takes the average American 28 hours and 30 minutes to prepare the
1040 "long" form with the three common Schedules A, B, and D, an increase of
34% since 1995. The 1040A, or "short" form, along with the common Schedule 1,
takes nearly as long to prepare (11 hours, 32 minutes) as the long form did
just nine years ago.
* Today's short form, at 48 lines, has double the number of lines as the
1945 version of the *standard* 1040 tax return.
* The increase in the tax law's complexity alone has added roughly 1 billion
hours in annual paperwork burdens over the last 10 years -- part of the
overall IRS-induced paperwork burden that is currently estimated at a
staggering 6.7 billion hours per year.
* Today, taxpayers must wade through 131 pages of instructions for the
standard 1040 form, which is more than triple the number in 1975 and over
double the number in 1985, the year before taxes were "simplified." And these
estimates are probably too low since they ignore the countless hours spent on
tax minimization strategies.
* The growth rate of returns prepared by tax professionals reached a record
62.1% (as of April 2 of the current 2003 tax year). Counting
computer-prepared returns, that figure would rise to 88.4%.
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 another
government tax program run amok, the "Alternative Minimum Tax" (AMT), a
parallel tax system once aimed at ensuring the wealthy paid a substantial tax
bill. By 2010, as many as 32 million taxpayers could be forced to complete *a
second tax return* for (and pay) the AMT.
(Source: National Taxpayers Union Policy Paper 113 and press release:
www.ntu.org )
