Taxes: the cost of compliance

Tax Day is coming, and in its honor we have another video from the Center for Freedom and Prosperity, in which Hiwa Alaghebandian discusses the enormous amounts it costs our economy just to comply with IRS regulations:

Either a flat income tax or a VAT as a replacement for the income tax seems more and more attractive all the time.

(via Dan Mitchell)

LINKS: More at Hot Air.

7 Responses to Taxes: the cost of compliance

  1. Porkchop says:

    But think of all the jobs it would cost! All those expenses pay for the salaries of hundreds of thousands of accounting drones. What would they do if they fixed the tax code and all their arcane knowledge became useless?

    Much like tort reform, the likelihood of changing something with this many people suckling at its teat are less than zero.

    I’m with you in that I’d much, much, MUCH rather see consumption taxes replace income taxes, but it won’t happen in our lifetimes, if ever.

    As far as VAT goes, 1) places with VAT also have income tax, too, and 2) there’s a surprising amount of paperwork associated with VAT in the UK.

    • Phineas Fahrquar says:

      Is that paperwork mostly for exports to the UK, or does it burden them internally, too?

  2. Porkchop says:

    It is definitely more time consuming than doing it for the state of Indiana, and probably a little more than Massachusetts (which is far more complicated than IN).

    Good Guardian article on it:

    The last paragraph answers your question, but the whole thing is interesting. If you’re super-curious, here’s the info for filing online:

  3. Porkchop says:

    I didn’t watch the video before.

    1) The IRS is not going to be running Obamacare as stated in the video.

    2) What’s the audience for this? What’s up with the spokesmodel in the tank top?

    • Phineas Fahrquar says:

      The IRS is not going to be running Obamacare as stated in the video.

      It’s a weird situation: they definitely are charged with ensuring that we all have the proper insurance, but then it’s been claimed that the bill prevents them from enforcing the penalty. Yet later, the IRS Commissioner said “Yes, we can.” I’m not a lawyer, nor do I play one on TV, so… I dunno.

      As for the spokeswoman, that’s Dan Mitchell’s former intern, (IIRC) a grad student in economics. I had no objection to the attire. 🙂

      • Porkchop says:

        It’ll work like every other kind of compliance check: by x-ref’ing databases. Does the IRS collect your state taxes? No, but they do get info from the states telling them how much tax you did pay (if any).

        You’re liable for your total tax bill. You can’t opt to (for example) not pay Alternative Minimum Tax if you owe it. You earn extra money as a sole proprietor, for example, you’re required to pay Social Security and Medicare/Medicaid taxes for that income if they don’t take out FICA. It is just like any other tax.

        In Massachusetts, you declare if you’ve got health insurance or not. Just like any other tax dodging lies you may make on your form, they fine your ass if you lie and they catch you.

  4. Porkchop says:

    I actually liked this one (by the same group):

    Though based on the clothing progression in the videos, the next one will have the presenter in a bikini.

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