The U.S. tax code is so ridiculously complex and difficult, it's no wonder most of the Obama administration can't figure out how to pay their taxes. And at over 70,000 pages long, how can it possibly be fair?
Cato put together the following video to show you just how complex our tax system has become.
New Video Exposes Nightmare of IRS Complexity
There is also an under-appreciated connection between simplicity and fairness. My colleague Will Wilkinson sagely observed that “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.” The tax code is a good example. Many leftists want the tax system to penalize success with high tax rates. I’ve explained why this is economically misguided in a video on class-warfare tax policy, but it’s also worth pointing out that a simple and fair tax system like the flat tax makes it much more difficult for the well-connected to take advantage of complexity. Simply stated, the tax system should not punish the rich with high rates (notwithstanding the neurotic views of self-loathing trust-fund heirs), and it shouldn’t reward them with special deals.
Then of course, there's the ridiculously high cost of government.
The Costs of Government
Government artificially restricts economic activity in hundreds of ways. These include the restrictions the FDA imposes on new drugs and "alternative" medicine; the hundreds of thousands of drug offenders (who would otherwise be productive citizens) living off the taxpayer; the tremendous macroeconomic uncertainty caused by poor Federal Reserve policies over the decades; and, finally, the moral hazard engendered by the trillions of dollars in direct and indirect bailouts of the financial sector since 2008. This article has considered none of these additional sources of loss. Doing so would only add to the already high estimate of the gain from reducing the size of government.
Despite this article's narrow focus, it has, nonetheless, documented a $2.6 trillion increase in annual economic output if the government were to restrict itself to its classic role of protecting the country's residents from criminals and invaders. Such an increase would have meant an 18 percent increase in GDP in 2009. It also works out to an average of about $8,500 per man, woman, and child in America, per year, starting almost immediately after a hypothetical rollback of Big Government. The only long-term component in our calculations was the disincentive effect from high tax rates. The other categories would yield their savings almost immediately, just as soon as businesses could adjust to the new influx of workers (previous students) and the influx of cash in consumers' pockets.
But wait, there's more!
If the income tax isn't bad enough...
“Breath tax”: The infamous “death tax” now has a new sibling: the $17 billion “breath tax.” The new health overhaul law requires everyone in America who breathes to have health insurance by 2014; … Internal Revenue Commissioner Douglas Shulman said that enforcement of the individual mandate will come by seizing tax refunds and “collection, if need be.”
Taxes on medical devices ... all will be among the products and procedures subject to ObamaCare’s special $20 billion medical device tax.
[S]tarting in 2014, Americans will be forced to buy health insurance, and the federal government will be actively making it more expensive.
Simply put, this health overhaul plan will take at least $569 billion out of the pockets of taxpayers and businesses over the next ten years through new and higher taxes, and will make the problems of soaring health costs even worse.
Boy, I’m sure glad Obama campaigned on the promise not to raise taxes on the middle class.
Taxes. Taxes. Taxes ... Progressives claim they love paying taxes, but we all know better, don't we?
