THE COSTS OF THE FEDERAL INCOME TAX SYSTEM TO THE ECONOMY
The Trump administration continues to examine government agencies seeking ways to improve their efficiency and ensuring that they are doing their stated duties.
We hope that the Trump administration has reviewed the study done by The Tax Foundation about the compliance and other costs of the Internal Revenue Code.
Here are some of their conclusions:
- We paid $4.9 trillion in federal taxes that consume 17% of U.S. Domestic Product.
- In 2023, Americans filed 271.5 million tax returns. Of these, nearly 71 percent, or 192.3 million, were individual and corporate income tax returns, while another 36.3 million were employment tax returns.
- According to the White House Office of Information and Regulatory Affairs (OIRA), Americans will spend more than 7.9 billion hours complying with IRS tax filing and reporting requirements in 2024.
- This is equal to 3.8 million full-time workers doing nothing but tax return paperwork—roughly equal to the population of Los Angeles—and nearly 46 times the workforce at the IRS.
- Assuming a reasonable hourly wage, the 7.9 billion hours Americans spend complying with the tax code costs the economy roughly $413 billion in lost productivity.
- In addition, the IRS estimates that Americans spend roughly $133 billion annually in out-of-pocket costs to comply with the tax code.
- This brings the total compliance costs to $546 billion, or nearly 2 percent of GDP.
- OIRA estimates show that taxpayer compliance now comprise 66 percent of the 12 billion total hours Americans spend complying with federal paperwork and 72 percent of the $184 billion in government-wide out-of-pocket costs for regulations.
- The forms required by pass-through businesses, such as S-corporations and LLCs, to receive the 20 percent deduction for qualified business income costs those taxpayers over $19 billion.
- While many pass-through businesses are individually owned, we’ve applied the higher accounting wage to this calculation because of its complexity.
- The income tax returns for estates and trusts impose a burden cost of $20.2 billion per year. To put this in context, the Office of Management and Budget (OMB) estimates estate and gift tax revenues will total $29 billion this year, which means the tax costs taxpayers nearly as much to comply with as it raises in revenues.
CONCLUSION
If there was no alternative to the irrational and unfair income/payroll tax system that creates such a cost to each of us, we would just have to tolerate it “for the good of the country.”
However, there is an alternative—the FAIRtax, a national retail sales tax on new retail goods and retail services. The FAIRtax provides a family credit so that all purchases up to the poverty level for each family are not taxed. There is no withholding from your paycheck.
When the FAIRtax is passed:
- It is estimated that compliance costs and regulatory burdens will be reduced by 80% to 90%.
- Except for retailers, none of us will ever have “report” our income to the government.
- None of us will have to report what we spent to the government.
- None of us will ever have worry about the IRS questioning our return and demanding additional tax, penalties and interest.
- None of us will spend any time keeping receipts.
- None of us will recall April 15th in a few years as “Tax Day”.
Many of you have labored tirelessly for freedom from the federal income tax and the IRS. You deserve a great deal of credit for your efforts to educate the American people on the need to fund the American government in a way that is good for America and returns freedom to the American people.
It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite. We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax.
Make no mistake about it. The FAIRtax is a grave threat to the Ruling Elites. It will strip them of their power and their ability to control us though the tax system. Their opposition to the FAIRtax will be fierce and unrelenting. And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power.
However, with the support of this President, we can finally eliminate the income tax and the IRS!!!
Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16th Amendment as well so no future administration can ever shackle the American people with an income tax again.
We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.
This will take the diligent efforts of all of us. We need your financial assistance, and we need your grass roots assistance.
If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.
Please email us at info@fairtax.org and we will give you some options on how you can best help us.
At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax. If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already. If not, ask why not. If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them.
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?
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.