Tax Deadline April 15

Today is the tax deadline April 15. This date seems to loom in the minds of many, but why is it such a perilous day? According to Internal Revenue Service statistics Americans will spend nearly 27 hours to prepare simple 1040 returns and the accompanying common schedules that follow. That is a lot of time! There must be an economic effect hear. The first question is when are these people getting their tax returns completed? If these people are spending time and money to get there complex tax returns prepared are they working or waiting in line at the local tax service. The second question I pose is, why does tax preparation take so long and why does it have to be so complex and complicated? The tax system in our country needs to be overhauled. It is getting really out of hand and I believe it is costing the country more to tax its people than it actually benefits from tax revenue.


Dr. Tufte said...

There are cost estimates of doing taxes, and they run into the hundreds of billions of dollars.

Here's a pretty basic version. Assume the average person's time is worth $20/hour, that they work for 25 hours on their tax return, and that 150 million returns are filed in the U.S. each year. That works out to $75B, and doesn't count corporate taxes.

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