THE COMPLEXITY OF THE INCOME TAX CODE
The complexity of the income tax code in the United States negatively affects taxpayers, businesses, and the government. This complexity arises from a number of factors, including conflicting policy goals, frequent legislative changes, and the intricate nature of modern economic activities.
While there is an almost endless list of problems with the present income/payroll tax system, below is a list of seven particularly troublesome problems with the present system.
The First Problem
The present income tax system is not solely designed to raise revenue. Increasingly, it is used by the party in power to reward their friends and punish their enemies. It’s also used to promote social programs that benefit groups of American taxpayers currently in favor in D.C. It’s also used to induce people to make personal decisions that align with the ruling party’s agenda. These goals frequently conflict with each other, leading to intricate provisions and regulations.
The Second Problem
The more D.C. tries to make the income tax “fair”, the more complicated it becomes. An example is the Earned Income Tax Credit (EITC). The EITC is designed to support low-income families but involves detailed eligibility criteria that complicate filing and increase error rates.
The Third Problem
Providing tax incentives for specific activities, such as retirement savings, education, and energy efficiency, adds layers of complexity. Each incentive comes with its own set of rules, limits, and exceptions, making the tax code harder to navigate.
The Fourth Problem
The tax code is constantly being amended and revised. This contributes significantly to its ever growing complexity.
Each new provision, whether it is a tax credit, deduction, or exemption, adds to the overall complexity. For example, the Affordable Care Act introduced tax-related provisions that intertwined health care decisions with tax filings, further complicating the process.
The Fifth Problem
In a report to Congress, the Taxpayer Advocate stated that the Income Tax Code contains 9,834 code sections – many containing detailed subsections – and a six-volume set of corresponding regulations.
According to a study by the National Taxpayers Union, in 2023
- Americans will spend 6.5 billion hours collectively preparing and filing their taxes for the current tax season.
- The opportunity cost of the time spent laboring over taxes comes out to $280 billion, while filers also incur out-of-pocket expenses on preparation costs amounting to at least $133 billion.
- That total is likely higher but the IRS has not complied with statutory requirements to assess this cost across its full inventory of tax forms.
- The IRS is expected to collect nearly $5 trillion in taxes, but above and beyond that amount, American taxpayers have to shell out an additional $414 billion just to comply with the tax code.
The Sixth Problem
Complexity leads to decreased voluntary compliance, as taxpayers may inadvertently make errors or intentionally exploit ambiguities to evade taxes. The IRS faces increased challenges in auditing and enforcement, with high-income returns requiring significantly more time and effort to audit.
The Seventh Problem
Business entities, such as partnerships, corporations, and sole proprietorships, are subject to distinct tax rules. This diversity necessitates complex regulations to address issues like profit shifting, transfer pricing, and international taxation.
CONCLUSION
The D.C. Elites are profiting handsomely from the complexity of the current tax system. That’s why they really don’t care what kind of problems and hardships they create for the rest of us. They’re going to fight hard to keep the current tax system because it allows them to pander to their favored groups, exert control over people’s lives and make a lot of money in the process.
If the purpose of the tax system is to raise revenues, then there is a system for funding the federal government that eliminates all seven of these problems and many more:
Complexity leads to decreased voluntary compliance, as taxpayers may inadvertently make errors or intentionally exploit ambiguities to evade taxes. The IRS faces increased challenges in auditing and enforcement, with high-income returns requiring significantly more time and effort to audit.
The Seventh Problem
Business entities, such as partnerships, corporations, and sole proprietorships, are subject to distinct tax rules. This diversity necessitates complex regulations to address issues like profit shifting, transfer pricing, and international taxation.
CONCLUSION
The D.C. Elites are profiting handsomely from the complexity of the current tax system. That’s why they really don’t care what kind of problems and hardships they create for the rest of us. They’re going to fight hard to keep the current tax system because it allows them to pander to their favored groups, exert control over people’s lives and make a lot of money in the process.
If the purpose of the tax system is to raise revenues, then there is a system for funding the federal government that eliminates all seven of these problems and many more:
- That is so simple everyone can understand it and not need to hire a tax preparer.
- That shows the costs of the federal government on every retail receipt so all of us understand what we are paying and so all of us can determine if we are getting benefits that are worth the cost.
- That helps U.S. companies compete with foreign competitors and not move overseas.
- That keeps jobs in the U.S. rather than exporting them to other countries.
- That permanently establishes the solvency of Social Security and Medicare.
- That eliminates special treatment for any group of taxpayers.
- That benefits lower income groups more than the present income/payroll tax system.
- That allows each of us, not the Elites and their minions, to determine the amount of federal tax we pay.
- THAT IS THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.
D.C. is ignoring the one real solution that allows us to remain citizens and not subjects, the FAIRtax. The FAIRtax is simple, non-invasive, but most of all, IT WORKS!
The American people will overwhelmingly support the FAIRtax if they are given the chance and all of us will benefit.
The American people will overwhelmingly support the FAIRtax if they are given the chance and all of us will benefit.
The American people will overwhelmingly support the FAIRtax if they are given the chance and all of us will benefit.
President Trump, you want to eliminate the Deep State. One of the pillars supporting the Deep State is the federal income tax. ELIMINATING IT WILL BE THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
There is going to be a vote on the FAIRtax in the House of Representatives.
We now have the opportunity to force all Members of the House to show where they stand. They can:
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
There is going to be a vote on the FAIRtax in the House of Representatives.
We now have the opportunity to force all Members of the House to show where they stand. They can:
- Vote for the present income/payroll tax system or for the FAIRtax.
- Support the corrupt income tax and the IRS or eliminate it. It can’t be any simpler than that.
- Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
- Support the largest transfer of power from government to the people, the FAIRtax, or not.
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.