New Poll: 90% of Americans Say Taxes Too Complex & High, Tax Compliance Cost $409 Billion in 2016 (2.2% of GDP)
According to a new poll conducted by the American Action Network, the vast majority of Americans think that the tax code is too complex, and that taxes are too high.
A total of 90 percent of Americans believe that the personal income tax system is very or somewhat complex, and 60 of Americans would prefer a flatter tax system simply because it is more transparent and easier to work with.
Furthermore, some 62 percent of Republicans think taxes are too high in absolute terms, compared with 46 percent of Democrats (higher than one may have expected).
The network’s director, Corry Bliss says:
It’s clear that Americans, regardless of their ideology, widely support fixing our broken tax system. Americans recognize the positive impact a tax code with lower rates would have on working families and small businesses competing with other countries like China.
Of course, the American people are right: taxes are far too complex for most citizens to file themselves, particularly if they have a small business, or have multiple income streams.
The complex tax code hurts America’s economy in two main ways.
First, it’s expensive. A report from the Tax Foundation found that Americans spent $409 billion and 8.9 billion man-hours on tax preparation in 2016—2.2% of America’s entire GDP.
This is an enormous amount of money and time that could have been better spent on productive investments, hiring more people, or enjoying life—the only people who benefit are accountants and tax attorneys.
Second, the complexity bakes an asymmetry into the market which favors big businesses over small ones. Why? Because large companies, especially multinational firms, can afford to hire armies of accountants and lawyers to not only ensure they comply with America’s tax law, but that they reap the benefits of every possible deduction and loophole.
Small businesses don’t have that kind of money or time, and end up losing out on many potential savings—and if the IRS decides to audit them, they may need to close-up shop over a trivial violation (or face massive financial penalties).
Tax reform should be at the top of President Trump, and Congress’ list, as it’s critical to fixing America’s economy.