In a recent interview with Harvard Business Review, Harvard Business School’s Mihir Desai and Bill George gave some great insight on inversions, who really pays the corporate tax, profit shifting, and corporate tax...
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Average Taxpayer Spends 21 Hours Each Year Preparing for IRS
The IRS has released new figures regarding the burden that tax compliance places on the average tax filer. As today's news section of Tax Analysts points out:
U.S. taxpayers pay nearly $25 billion a year and on average need almost a whole day to do their taxes, according to estimates based on the IRS’s new model for measuring the tax system’s burden.
The IRS estimates, based on Forms 1040, 1040A, and 1040EZ data from the 2003 tax year, show that taxpayers pay an out-of-pocket average of $179 for every return filed. However, the estimates reveal large discrepancies in the time and cost, depending on the major form filed in a taxpayer’s return. For example, taxpayers filing Form 1040 need an average of 31 hours to prepare their return, whereas taxpayers filing Form 1040EZ need only seven hours. Likewise, it costs an average of $242 to prepare a 1040, while a 1040EZ is only $29.
America needs a reformed tax code that is simpler, more transparent, and does not heavily distort economic activity. When 81 percent of Americans feel that the tax code is too complex (see Tax Foundation/Harris Poll), lawmakers should realize that something needs to be done. We hope the President's Tax Reform Panel will heed these calls from the American people for an overhaul of the current system.
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