Thursday, June 20, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, October 25, 2015
Ten Million Words and Counting
By Tom Yamachika @ 5:01 AM :: 3759 Views :: Taxes

Ten Million Words and Counting

by Tom Yamachika, President, Tax Foundation Hawaii

Okay, folks, you and I know that the tax system we have in this country is pretty complicated. But did you know that the complexity has been expanding over the years so that the federal law and regulations are now over ten million words?

Research at the national Tax Foundation tried to measure the complexity of the federal tax code by counting the number of words in it, and the Treasury Regulations, over the years. They concluded that today, the federal tax code is roughly six times as long as it was in 1955, while federal tax regulations are about 2.5 times as long.


The more there is to know about tax law, the harder it is for Americans to file their taxes quickly or correctly. Even the IRS’s own Taxpayer Advocate Service said in a 2012 report that tax complexity creates real costs for American taxpayers and the U.S. economy. The National Taxpayers Union Foundation estimated that Americans spend 6.1 billion hours and $233.8 billon complying with the tax code. Due to increasing tax complexity, over 90 percent of taxpayers now hire professional tax preparers or use tax preparation software.

One of the many reasons why the tax laws have become so complicated is that the tax system is used to implement social policy and cure a number of other ills, not simply to get people to contribute to the cost of running our government. At the state level as well as the federal level, the tax system is used to give credits and incentives to businesses of various kinds; to provide monetary relief to the poor; and to penalize behavior seen as undesirable (take, for example, the federal excise taxes on gas guzzling vehicles and ozone-depleting chemicals).

And when people over the years come up with different approaches to solve the same problem, we don’t simply pick one approach, we use all of them. In Hawaii, for example, we attempt to provide poverty relief not by adjusting tax rates, but by giving a food/excise credit, by adding to it a credit for low-income household renters, by giving income tax credits and general excise tax exemptions for affordable housing, just to name a few.

Multiple approaches to an issue not only create complexity, because ordinary people as well as tax professionals need to know something about all of these approaches in order to prepare a tax return competently and correctly, but also create a very real possibility that multiple provisions kick in at the same time to produce a result that lawmakers may not have intended. We have written before about how we in Hawaii had three different provisions that were designed to extract a little more tax from the wealthy, with the result that a couple who earns the last dollar to reach the $200,000 AGI mark suddenly earns a Hawaii tax bill that is $3,671 higher. (One of those provisions will expire at the end of this year but we still have the other two.) These issues certainly plague the federal code as well.

“Keep it simple, stupid.” Does that sound familiar? Think ten million good reasons for that phrase when it comes to taxes. It’s not easy, but it needs to be done!


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii