Individual taxpayers spend more than 3.5 billion hours complying with the code. That time is worth an estimated $92.6 billion. They also spend an additional $27.7 billion on preparation services, software, and other out-of-pocket costs.
For their part, corporations spend about $170.4 billion on tax compliance, or the equivalent of more than 40 percent of all corporate tax collections from 2007. In total, more than $290 billion is flushed down the drain of tax compliance every year at the federal level.
Scrapping our 67,000 page monstrosity of a tax code and replacing it with a simple, easy to understand national sales tax or a flat income tax would be a short-term stimulus without the long-term harm of the massive borrowing that Congress and President Obama favor.
Such a simplification would also benefit potential Obama cabinet nominees and members of Congress who can’t figure out the tax code themselves.