The cost of taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es goes far beyond the dollar amounts written on the checks that taxpayers send to the IRS or the amount withheld from their paychecks. The complexity of the U.S. tax code requires Americans to spend an exorbitant amount of time and money filing their taxes, learning about the deductions, credits and other provisions that apply to them, and hiring accountants to help them sort through it all.
All the wasted time, money and effort spent on taxes is not a uniquely American phenomenon. As we’ve written before, Canada has its own problems with tax complexity and compliance costs. Last week, a Tax-News.com article discussed a report on Canada’s high cost of tax compliance:
Canada’s “overly complex” tax system imposes unnecessary and significant hidden costs on businesses and consumers, the Certified General Accountants Association (CGA) of Canada has said, calling for the launch of a debate on tax simplification.
In a new study commissioned by CGA-Canada, “The Need for Tax Simplification – A Challenge and an Opportunity”, key issues of tax simplification are highlighted. The study shows that consumers, businesses and the economy feel the effect of an overly complex tax system in more than just tax bills; the time and money spent to comply with the system adds up to a significant hidden cost. In addition, it is pointed out that few attempts have been made to simplify the tax system since its creation in 1917. As a result, CGA-Canada is promoting the need for a review of both the personal and corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. systems.
Commenting on the findings, CGA-Canada’s President and CEO Anthony Ariganello said: “Canada’s tax system is among the most complex in the world, which hurts our economy and adversely affects small and medium-size enterprises and individual taxpayers. We believe tax simplification is good for taxpayers, businesses, governments and our economy. Our members – CGAs in business, industry and private practice – overwhelmingly tell us it’s the top issue they want governments to tackle. We’re looking beyond the numbers to see what’s in the public’s best interest.”Share