John Boehner’s misfire on the cost of tax compliance

[Bass v 2.0]

John Boehner’s misfire on the cost of tax compliance - The Fact Checker - The Washington Post

The Facts


Boehner’s spokesman Brendan Buck said that Boehner’s figure—which he tossed out at the end of a news conference--came from a 2005 (!) study by the Tax Foundation. The study estimated that the cost of compliance was about $265 billion—22.2 percent of federal revenue—in 2005. The study then projected ten years in the future, calculating that the figure would be $482 billion in 2015, based on an estimate of 20.7 percent of expected revenue.

Of course, with the Great Recession, tax revenues have fallen far short of estimates back in 2005. At a 20.7 percent rate, the cost of compliance last year would have been a comparatively modest $230 billion.

And where does Cain get his $430 billion figure? That appears to have come from a much more recent study, by, among others, Arthur B.Laffer. But this study appears equally dubious.

The study relied on 2008 tax revenues of $1.4 trillion—before the recession hit in full force. Then it took a figure from the Internal Revenue Service’s Tax Advocate—that individuals and businesses spent 6.1 billion hours complying with tax filing requirements—and multiplied it against an absurd hourly income of $68.42 on the theory that the wealthy pay most of the income taxes.

Speaking of the IRS Tax Advocate, that office’s estimate of the cost of compliance in its 2010 annual report is a much more modest $163 billion. Given that this is an official government estimate, it seems a much more reasonable figure to cite. Other estimates put the cost of compliance even lower, from five to 10 percent of revenue collected, or as little as $55 billion.

Misinformation masters- the GOPtards.

 

[uscitizen]

So Boner is argueing for a flat % tax on corporations?

that would do away with the compliance costs.

It would also cost thousands of well paid jobs.