10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

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images politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Four Score and 70 years ago, honest Abe started the first income tax.

The Bottom Line:

  • The current income tax was started in 1913.
  • What is taller than a giraffe and weighs 145 lbs?  The Tax Code (72,536 pages)
  • Regression analysis predicts by 2050 the tax code will be around 140,000 pages.
  • The Tax Code has 5 times as many words as the bible.
  • Compliance costs are estimated between 300-500 billion dollars/year.

 

1. Brief History:

  • To help pay for the War Between the States (aka Civil War and in the Dirty Dirty called War of Northern Aggression) the first income tax started in 1861, as part of the Revenue Act of 1861 (3% of all income over 800 dollars).
  • The unconstitutional income tax was repealed in 1872.
  • The next federal income tax was established in 1913, but  required an amendment to the United States Constitution to make it legal (The 16th Amendment).
  • The 1913 income tax only affected couples making $4,000 or more/year (which is $90,300 today w/inflation)  at 1%.  The tax return was only 1 page and the tax codes were 14 pages.

2. Historically Americans Hate Taxes:

 

bostontea politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Colonial Americans started a fecal blizzard over a Tea Duty (that sounds funny) of 10%. You could say they were Bout it Bout it.

WhiskeyRebellion politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Scotch-Irish Americans (aka Crackers) raised up when the newly formed US implemented a Whiskey Tax (aka Whiskey Rebellion). It took George Washington himself to chill everybody out.

Yes, it is ok to feel frustrated about our fecal blizzard we call the U.S. tax system.  Heck, it is an American tradition from the Boston Tea Party, Whiskey Rebellion, to today’s Tea Party.  Some interesting notes on the Whiskey Rebellion:

tjbourbon politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

TJ was more of a Bourbon man

3. The Federal Tax Code is 72,536 pages:

 

tax code politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

What is taller than a giraffe and weighs 145 lbs?  The U.S. Tax Code.

  • Assuming average thickness of paper = 0.0038 inches.  The tax code is 276 inches or 23 ft. in stacked height, which is taller than a giraffe.
  • Assuming each individual sheet was spread evenly (8.5 inches).  The tax code length would be 616,556 inches, 51,380 ft., or 9.73 miles.
  • Assuming 500 sheets=7lbs.  The tax code weighs 145 lbs.
  • Assuming 20 pages print in 1 minute.  The tax code would take 3,626 minutes or 60 hours to print.  I’ll bet you a G that your printer would crap out before it could all print out.
  • Assuming 1 cartridge costs 20 dollars and  prints 200 sheets (typical Dell home printer).  The cost to print the tax code would be $7,253 or 363 cartridges (maybe you can find a good deal on ink).
  • The Hong Kong tax code is less than 200 pages and has been around for 60 years.
hong kong phooey politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Hong Kong Phooey chops the crap out of excessive tax codes.

4. By 2050, the Tax Code will be 138,000 pages:

Future Pages politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Predicting future number of pages using Linear and Polynomial Regression from this chart data.  Done by yours truly.   I know there are many variables for predicting the future, but historic trends show my calculations have merit.  I did not show exponential regression, because it will make your eyes bleed.  Plus the graph was too large to post.

5. The Cost of Compliance ($300-$431 billion/year):

This economist (Laffer) says compliance cost $431 billion/year. For every dollar sent to the IRS, it costs 30 cents in compliance.  Making the tax code as efficient as a three-toed sloth picking dingle berries.

threesloth3 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

The Sloth can run about 10 miles (top speed 0.15 mph) before you could print out the US tax code.

6. The Federal Tax code has over 3.8 million words.

  • 5 times the amount of words in the bible.
  • The average person can read 250 words per minute.  Assuming the average reader took no breaks, it would take 15,200 minutes, 253 hours,  or 10.5 days to read the tax code.
  • Atlas Shrugged has 645,000 words.  The tax code has 5.9 times that amount.
allnighter politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Poor Billy. He is giving his coffee the booger business while trying to pull an all weeker by reading the tax code

7. U.S. citizens spend 7.6 Billion hours complying with the tax code:

philosraptortime politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

So basically the time wasted doing taxes actually hurts government revenues.  Just think, that 7.6 billion hours could have been used for something productive like working and producing more goods and services. 

8. The IRS hot line is known to use  inaccurate information and the wait time is redunkulous:

 

phone politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

 

Facts from 2009 Government Accountability Office (GAO) report:

  • 69% of callers received assistance.
  • Average wait time was 8.4 minutes.
  • Tax payer cost per call $25.75 (total 670 million).  Now I recommend outsourcing to India.
  • From the above video, if the IRS hot line gives bogus information you still get in trouble for filing your taxes incorrectly.

9. Raising Taxes on the Rich is Futile (Hauser’s Law):

Election season is coming up,  politicians are getting all geeked out about dissing the rich for not paying their fair share.  However, almost 50% of income filers pay no federal taxes at all.

rwn incometax3 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Crymiddleclass tax1 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Crybea income 550x3301 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Let’s take all their money:

If the U.S. confiscated all the income from millionaires and billionaires (the top 1%) it would equal 938 billions dollars. This is not even close to paying down this years deficit. 

Hauser’s Law:

 

doogie politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

 

Hauser Law2 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Dang, the upper rate used to be 90%. How did that work out?

Basically you can fool with the tax code all you like, but the government is only getting around 20% of the GDP.  You would think that the Federal Govt. should set their annual budget to be around 20% GDP.  Well, they are an overly optimistic bunch.

growth federal spending revenue 6001 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

10. The U.S. National Debt:

usdebtchart1 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Yep, we are screwed.

usdebtchart2 politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

I prefer a paper cut with a side of lemon juice.

After seeing all of this debt stuff:

abandon politics  10 Reasons Why The U.S. Tax System Stinks So Bad It Makes An Onion Cry

Summary:

For the love everything holy, please vote in people that will actually simplify the tax code.  I don’t care if you swing left, right, up, or down.  It isobvious that our tax code is a really bad joke.  You can blame the IRS all you want, but  Congress has the power to change the system.

I am a big fan of the Fair Tax, but any simplification will do:

The Fair Tax

The Flat Tax

Americans For Tax Reform

National Tax Payers Union

The Henry George Foundation

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  • RHapp

    My simplified tax plan

    1. Flat tax – somewhere in the 15-20% range I suppose. No deductions at all – stop using the tax system to affect economic behavior. It should be used solely to fund the govt. Why not Fair Tax? – see last paragraph.

    2. Everybody pays – you make money, you pay. Everyone should have a stake in our tax system.

    3. No difference in tax between labor and capital. All income – from labor, cap gains, dividends, interest, etc – all taxed at the same flat rate. Selling the use of money (capital) is important to our economy, but so is selling labor. Tax them the same.

    4. Corporations/Business pay no taxes on any money distributed to US taxpayers. The stockholders and workers pay the taxes (see 1-3). Corporate taxes were always just a way of hiding taxes on Americans, the ones who actually pay them.

    5. Corporate income distributed to non-US taxpayers (foreign investors, etc), gets taxed at the same flat rate as everyone else.

    Flat Tax vs Fair Tax – either is great in my opinion – I just don't think we could deal with the constitutional amendment problem – and we sure don't want to allow them to have BOTH an income tax AND a consumption tax.

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