Commentary

Overtaxing

This article appeared in the Washington Post on April 16, 2006.

So, you’ve waited until the last minute to fill out those tax returns, and now you’re overwhelmed by the proliferation of forms, the longer instructions and the increasing clutter of special breaks and loopholes. Looking for someone to blame? Try the Republican majority in Congress.

After winning control of Congress in 1994, Senate Majority Leader Bob Dole (R-Kan.) and Speaker Newt Gingrich (R-Ga.) called for fundamental tax reform, saying the tax code was “overly complex” and “indefensible.” Virtually every GOP leader since then has echoed the call for reform, without ever coming close to delivering.

Since the mid-1990s, the number of pages of federal tax rules has soared by 64 percent, the hours Americans collectively spend complying with the tax code each year has surpassed 6 billion, and the annual cost of complying has more than doubled to $265 billion.

The only winners: tax lawyers and accountants. H&R Block has tripled its revenue since 1995 as the share of taxpayers needing professional expertise has grown. Middle-class households are struggling through the thicket of tax rules related to children, home ownership and retirement plans, while even low-income families need outside help to figure out all the special tax benefits that apply to them.

At least this year tax procrastinators have an extra weekend before they must file. The deadline is Monday for most of the country and Tuesday for the District, Maryland and some New England states, where returns are processed in Massachusetts. That 24-hour reprieve comes courtesy of those who battled taxes long ago. Monday is Patriot’s Day, a Massachusetts holiday commemorating the beginning of the Revolutionary War — a chance to reflect on King George III, the IRS and, of course, finish that 1040.

Chris Edwards is tax director at the Cato Institute and author of Downsizing the Federal Government.