The Cost of Tax Preparation = Oklahoma's GSP
Updated: Americans will spend about 4 billion hours this year filling out individual income tax forms. At the average hourly private industry compensation cost of $27.42, that time is worth about $110 billion, equivalent to almost the entire annual Gross State Product (GSP) of Kansas. Add to that the $30 billion the IRS estimates Americans will spend out-of-pocket on tax preparation (tax software programs, tax preparers, accountants etc.), and it's equal to the $139 billion annual output of the state of Oklahoma.
9 Comments:
If you broaden the cost to include not just compliance but also the IRS's budget, add around $11 billion:
http://online.wsj.com/article/SB10001424052748704107204575039481828413658.html
Sorry, here's the link:
http://online.wsj.com/article
/SB10001424052748704107204575039481828413658.html
Here is a radical, but logical, tax proposal: Let's just exempt a significant minority from paying federal tax.
Note to gettingrational:
I used to think the same way, but ---
If you exempt 60% of the population from paying taxes, then those people will have no incentive to reduce government spending - after all increased government spending will cost them nothing and may actually provide some small benefit to some of those people.
A lower, flat tax is a better idea. Everyone benefits from government services, so everyone should be willing to pay something for them. There is no such thing as a free lunch!
Everyone benefits from government services, so everyone should be willing to pay something for them.
Try telling that to someone with no money. Willing to pay and able to pay are different.
Besides some people benefit from government services a lot more than others, so by your own argument they should be willing to pay more, right?
One could eliminate all deductions tax medical insurance premiums and abolish the corporate tax, making it quite simple, but to many oxen would be gored in the process. Starting with the mortgage interest deduction, the state and local tax deduction, and the like. We could arrange it so with no corp tax all business is conducted by corporations, with taxes on dividends and salaries paid. (Dividend and capital gains could then be at the same rate as regular income since there is no corp tax). If a landlord you would have to form a corp to hold the property for tax purposes, but its probably a good idea anyway. Then we could shoot schedule C and all its complexity and underlying forms. A business would file a P&L statement, and provide an indication of wages paid and dividends paid. W-2 and 1099. But as I noted to many favored folk would cry you are killing me.
I wonder what the ratio is between the cost of compiance and collection and the total tax collected.
Consider the following from Cato:
The Joy of Tax Serfdom
"Everyone benefits from government services, so everyone should be willing to pay something for them. There is no such thing as a free lunch!"...
Ahhh, absolute nonsense...
In fact I would venture to guess that we need more federal government services like Custer needed more indians...
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