Complex state and federal tax laws make filing taxes far too hard, wrote Bill Harris, former CEO of Intuit and PayPal cofounder. When the income tax code when into effect in 1913, it was just 27 pages long. However, it’s now been extended to more than 17,000 pages—and it frequently changes, with an average of nearly 400 alterations each year.
Many of these changes, such as a current debate over the child tax credit that could affect this year’s tax filings, lead to confusion that the IRS doesn’t have the resources to clear up. Just 13% of taxpayers who contacted the IRS in 2022 were able to talk to an actual person.
On average, Americans spend 13 hours filing their taxes, equaling a total cost to the U.S. economy of $26 billion. Compare that to other countries, such as Japan or the Netherlands, which have simpler tax codes that can cut down the time spent filing to just a few hours.
Sadly, a “radical simplification of the tax laws” aren’t in the cards, Harris wrote, because both Democrats and Republicans use the code as a resource to advancing political agendas. Therefore, the answer must be to change technology by the IRS rebuilding its internal system to process tax codes and new online portals that make filing simple tax formers faster, cheaper and easier.
