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Increasing tax complexity has direct costs in terms of the amount of time it takes for individuals and businesses to fill out forms and to keep track of all the records necessary to file.
More importantly, complexity in the code also erodes the perceived fairness of the system. A more complicated system leaves taxpayers feeling that their fellow citizens might be taking advantage of the system, and that they them- selves would do better if only they had made different choices, been a little less honest, or paid for a better tax accountant.
While there is no perfect measure of tax complexity, there are many indications that the tax code has become increasingly complicated and in need of reform. Below are some measures of the number and complexity of IRS forms, the amount of resources devoted to collecting taxes, the number of tax expenditures, tax lobbying statistics, and the total compliance costs. . . by the numbers.
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Accompanying Graphic (PDF)