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by 卡塔尔世界杯常规比赛时间 research
here’s something that almost all americans can agree on: the internal revenue code is too complex. worse: it’s becoming irrelevant.
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how complex?
- the code contains 9,834 sections.
- many of the sections have detailed subsections.
- on top of the code is a six-volume set of corresponding regulation.
- many of the sections, drafted decades ago, are irrelevant to today’s world.
why irrelevant?
- families are more complex, with multigenerational households, split child custody, blended families and unmarried partners living together.
- technology has led to unprecedented business models.
- families and businesses are less fixed to physical location.
- the nature of employment has changed with more gig work and employees with multiple “employers” in multiple places or even non-places.
why the complexity?
- it isn’t just the tax code. the irs is tasked with administering many social benefits that overlap the tax system.
- some rules come and go from year to year while others linger beyond usefulness.
- taxation is used not only to raise revenues but to promote economic shifts.
it isn’t just the taxes, it’s the time
- in 2022, businesses spent 1.14 billion hours and $48.3 billion on tax preparation.
- in 2022, individuals spent 897 million hours on recordkeeping and 1.15 billion hours on tax preparation.
- irs tax compliance constitutes 71 percent of federal paperwork.
- taxpayers often have to spend money on preparers and software.
the consequences of complexity
complexity is deleterious all around.
- complexity rewards taxpayers who can afford tax advice and legal defense.
- complexity discriminates against taxpayers who cannot afford advice or defense.
- it encourages tax fraud.
- taxpayers may dodge taxes simply to avoid the complexity.
- unintentional errors result in either lower revenues or excess payments.
- complexity requires the irs to constantly update forms, publications, computer systems, training, etc.
- complexity makes audits more difficult or almost impossible.
- complexity requires the irs to answer more questions and provide more guidance.
- complexity can’t keep up. it excludes new kinds of families and businesses from credits and deductions.
- complexity suppresses economic growth by diverting resources to recordkeeping, tax preparation and tax strategies that hinder business strategies.
- complexity undermines voluntary compliance.
- inadvertent mistakes, reduced voluntary compliance and outright fraud generate a “tax gap” – taxes owed but not paid – of $496 billion annually.
national taxpayer advocate erin m. collins has determined that the tax code is one of the most serious problems that taxpayers face.
in her annual report to congress, collins only scratches the surface of the impossible complexity of the code. much of her detailed identification of problems focuses on tax rules relating to the economic security of children.
she told congress that
- definitions of qualifying children are not uniform;
- rules don’t apply fairly to modern family arrangements;
- the poorer the child’s family, the more complicated and transient the living arrangements, and
- the outdated code ends up excluding children who need assistance the most.
the nta’s report also pointed out how the tax laws of today don’t relate to the businesses of today.
- 16 percent of americans earn money from the gig economy, many with multiple gigs.
- 34 percent of gig workers don’t know they should be making quarterly tax installments.
- 43 percent fail to set aside money for taxes.
- though they tend to earn little, 90 percent have to pay a tax preparer or buy software.
- quarterly payments are illogical, with first and fourth estimates payable two weeks after the quarter, while second and third are due two weeks before the close of the quarter.
- gig “employers” (a shaky term) provide various kinds of tax information to workers, resulting in inconsistent and inaccurate tax returns.
recommendations
collins tried to wake congress up with five recommendations for congress – one big that’s not going to happen, and four smaller that easily could.
the big one that’s not going to happen:
“the tax laws should be simple enough for people and business owners to prepare their own returns or at least understand their returns …” collins wrote. “… the code should make it easy for the irs to administer the tax laws while also reducing burdens on taxpayers and practitioners.”
so simple, and yet … so impossible.
and the smaller four, which could happen:
- use uniform definitions throughout the code.
- adopt a consistent and more modern definition of “qualifying child” throughout the code.
- restructure the earned income tax credit and child tax credit by allowing separate worker and child credits to make it simpler for taxpayers and reduce improper payments.
- amend the code to set estimated tax installment deadlines 15 days after the end of each calendar quarter.