Americans Spent $409 Billion on Tax Preparation in 2016

Donald Trump spoke on the issue of tax reform last week, and with a tax code that’s four million words long, imposing a tax burden equal to nearly a third of the economy, the sooner action is taken, the better.

Even more interesting is that a lengthy and complex tax code doesn’t just hurt business – it also hurts government when it comes to raising revenue.

What many forget is that the government faces “leakages” in raising tax revenue. What I mean is that due to the cost of enforcing our tax code, the government must work harder to raise revenue. That’s due to compliance costs, because the IRS has to hire tens of thousands of workers to enforce the tax code. I don’t need to tell you that the government is generally inefficient at anything they do – and that inefficiency extends to collecting tax revenue.

Among the largest costs of a complex tax code, however, is the opportunity cost suffered from individuals spent complying with it Every hour spent complying with the tax code is an hour less they have to do literally anything else. And that adds up… massively.

A new report from the Tax Foundation discovered that Americans actually spent “$409 billion and 8.9 billion man-hours on tax preparation in 2016.” That’s 2.2% of America’s entire GDP!

That’s a lot of hours and missing dough. Hence, it should come as no surprise that most Americans favor simplifying the tax code. It’s one of the few issues Democrats and Republicans agree on. A new poll from the American Action Network found that 90% of Americans think the current tax system is too complex. Not only that, but 60% want a simpler, flatter system.

Does that mean we’ll finally get tax reform?

The public certainly supports it – we just can’t let the Left win with fear-mongering, as they did when it came to the repeal of ObamaCare.

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