Comments on: Complexity Tax: Tax Code is Its Own Tax

By: Jeff Baker

Jeff Baker — Fri, 15 Apr 2005 20:14:52 +0000

If you are using TurboTax, it spits out your effective tax rate right on Page 1 of the printed output (above the instructions, as part of the tax summary).

By: McGehee

McGehee — Fri, 15 Apr 2005 17:25:10 +0000

USA Today argues that the complexity of the U.S. tax code is itself a form of taxation.

I for one welcome USA Today aboard a bandwagon I climbed aboard 20 years ago.

By: Steve

Steve — Fri, 15 Apr 2005 17:25:07 +0000

I've been using either TurboTax or TaxCut for several years now and have been more-or-less pleased with that method of filing my taxes. (The less part having mostly to do with the aggravating "rebates" they use as a gimmick to advertise low prices.) I'm guessing the average person would be better off with one of these programs than going to H&R Block (which, ironically, owns TaxCut). I could file my taxes in a couple of hours if I had all my records organized properly. Since I never do, it takes much, much longer.

Technically this is also a bad thing. The tax code is so complex you have to buy a computer program to have it figure things out for you. That is a cost when you consider it produces nothing really. Taxes (and the spending of taxes) simply redistribute income, and come with their own losses (deadweight loss). Tax simplification is probably something long past due, but don't look for it to come anytime soon as tax lawyers and accountants would then be loosers.

By: James Joyner

James Joyner — Fri, 15 Apr 2005 17:13:55 +0000

I disagree that "bribery" is a substantial casue of the problem and would note that the exemptions are not just something for the "ultrarich." All manner of groups--the blind, the elderly, those with children, those with home mortgages, those with gambling losses, etc., etc., etc.--have successfully lobbied for exemptions.

By: pgl

pgl — Fri, 15 Apr 2005 17:10:34 +0000

The tax code is complicated but why? Oh yea - the ultrarich bribe politicians to put in a bunch of gimmicks so they pay less - and we pay more. Bush talks about simplication but does just the opposite. Ahem.

By: Robert Tagorda

Robert Tagorda — Fri, 15 Apr 2005 12:29:33 +0000

USA Today hits at an important point in tax policy. Often, we focus on how tax increases may create economic distortions by causing people to work less -- something measured through the labor supply. But that measurement can understate the impact of the tax: while people may retain the same hours of work, they may change their behavior in other ways, like reducing work effort, changing their willingness to take risks -- and, of course, paying for more accounting services to figure out the filing system or avoid paying higher taxes or both. It's the old "leaky bucket" at work.