Friday, May 14, 2010

The Real Cost of Taxes

Often times, we think of the dollars we pay to the IRS as the cost of income taxes. Most would say that they understand why taxes need to be paid, and many times don't even argue the amounts that are paid. However, how about the cost of complying with our complex tax code, which only seems to get more and more confusing with each new legislation. From the Fair Tax website:

New Health Care Legislation Brings Massive New IRS Requirements on Businesses

Hidden within recently enacted healthcare legislation are small provisions with massive implications for American businesses (see "In the News" below).

"With one stroke of the pen, American businesses are about to see a huge increase in paperwork and in tax compliance costs," said Hoagland. "We already pay more than $350 billion a year in tax preparation paperwork costs," said Hoagland. "That number is about to get a lot larger with new filing requirements on every American business."

The legislation requires businesses to provide every business buyer of goods and services a special tax report that the buyer is then required to submit to the federal government. "The additional 16,000 workers added the IRS to handle the healthcare program taxes and penalties will likely not be enough. Worse, the cost of obeying the already indecipherable tax code is about to go way, way up," said Hoagland. "As usual, the American taxpayer, the American worker, and American businesses will pick up the huge new cost of increased complexity. Those wasted costs will be paid for with dollars that would otherwise go to savings, new jobs and investments," he said.

"Congress just can’t stop itself from adding to the complexity of the tax code," said Hoagland. "This is another example of why the country will never achieve economic strength until this corrupted and expensive tax system is finally ditched forever."

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