The complexity in the tax code has been a matter of much debate. Taxpayers have been feeling the burden of complying with a very long and complex tax code every year. Even though there is a consensus that the tax code needs to be simplified, it will be difficult to generate consensus on what stays in the tax code and what is removed.
Billions of dollars and hours are being wasted to comply with the tax code each year. The annual report by the National Taxpayers Union (NTU) discloses that the economy lost $224 billion and 6.1 billion hours to remain compliant with the tax code.
Simplification of the tax code will save taxpayers from spending money on tax preparation, as many of them will be able to prepare their taxes themselves. A simpler tax code will also help in reducing mistakes in tax returns.
Taxpayers that cannot afford to hire tax preparation help often file incorrect tax returns or fail to make use of the credits allowed to them. Many times, taxpayers find themselves into tax debt because of erroneously filed tax returns. They end up paying more in taxes due to the penalty for the non-compliance and the interest charged on tax debt.