Tags: tax | economy | tax code | growth

Simplifying the Tax Code Would Boost Economic Growth

Friday, 12 Apr 2013 07:41 AM

By Barry Elias

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Complying with the tax code costs the United States roughly 2 to 3 cents for every dollar of economic activity and represents about 20 percent of federal income and payroll tax revenue received.

Simplifying this system could add as much as one-half of 1 percent growth each and every year, according to a recent study conducted by The Laffer Center.

In its 2011 Information Collection of the U.S. Government, the Office of Management and Budget estimated we spend nearly 9 billion hours per year to comply with the federal tax code. Assuming an average of $40 per hour, this equates to roughly $360 billion annually.

Adding direct outlays for professional tax preparers and tax software ($31.5 billion), IRS administrative expenditures ($12.4 billion) and comprehensive audit procedures ($9.3 billion), the total exceeds $400 billion per year, according to The Laffer Center study.

Reducing this compliance cost would permit a more effective and efficient allocation of resources and foster greater focus on innovative, entrepreneurial endeavors — in lieu of decision making based on tax minimization.

Simplifying the tax code could save the United States hundreds of billions of dollars in compliance expenditures, while providing additional economic growth of nearly $75 billion per year.

The major obstacle seems to be the relocation of employment for those individuals involved in these service areas. We need to think creatively to absorb these talents in other economic areas.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved