Fidel and Tax Compliance

There is no relationship in the two elements of the title, but this Author found some amusement in linking the Two: I am sure Fidel would be all for tighter Tax compliance. The man, though, has turned over the Cuban to his younger brother Rauel (spelling?). It seems unlikely that he will ever return to the World stage, approaching 80 yrs. old, and another Cold Warrior had bit the dust. His brother lacks sufficient political capital to make a transition of the Cuban economy to a modern-Day economy. He will not last much longer than Fidel.

Alicia Hensen has a good Post on the cost of Tax Compliance, which she states makes up some 22% of the total Income taxes paid. This is based upon a January 2006 Study by Hodge, Moody, and Warcholik. I make no attempt to deny the statistics, yet feel it is a might too high. Much of the Accounting Cost to Business would need be made anyway, as Operating Debt justification and Production Accounting. Business assigns such Accounting to Tax compliance for Ranting reasons, and mollify Investors. Hensen and the Others have some justification in adopting the fictionalized 22% Compliance Cost assigned to total collected Tax revenues.

Here is where I really get myself in trouble!

The Federal Income Tax law is a jungle of provisions extending back to its first application. Deductions, Exclusions, Exemptions, Preferments, and Tax Credits abound without estimatable boundary. They are composed of the Standard, commonly-recognized reductions of Tax burden, then follows the quicksand of special provisions, for which All need the aid and assistance of Tax Preparers; who consistently get it wrong as well. Now comes the Problem! Past the Standard reductions, which Anyone can figure, I estimate the special provisions may save individual Taxpayers no more than 7% of the demanded Tax revenue, while Business is saved at most about 12-14% of the Tax burden. It is clear that special Tax considerations are uneconomical! A standardized, clear Income Tax is the most economically efficient, and least burden of Compliance. lgl