Why Are US Tax Laws So Complicated?

1
Why Are US Tax Laws So Complicated?
2

• If used for raising revenue alone, the US tax
  system would doubtless be a much simpler affair.
  However, as the system needs to be fair,
  efficient and enforceable, and has been used by
  Congress to influence many aspects of political
  life and for delivering benefits to groups and
  industries for many years now, it remains
  complicated, and in fact, becomes more complex
  every year.
• If our taxes werent so complicated, it would
  simply mean that they wouldnt be fair for every
  US citizen, and if that is one of the primary
  goals of taxation, then it wont be set to change
  anytime soon. For taxes to be fair to those whom
  they apply to, they need to account for the
  differences between incomes and needs of
  individuals, families and businesses, and this is
  itself, complex.

3

• What are the goals of an efficient and fair tax
  system?
• It would be foolish for us to say that taxes
  shouldnt be fair. We are all tax payers, and so
  of course we want our own, individual taxes to be
  assigned fairly. They should be conducive to the
  state of the economy, be easy to enforce and
  simple to understand. They should account for an
  individuals characteristics, such as whether
  they are married and have children, as well as
  how much they earn compared to the cost of their
  expenditures, and everything should be carefully
  reported and documented. Yet despite agreeing
  upon this, we remain undecided as to exactly how
  important each of these factors should be.
  Resulting from this, policies regarding tax rules
  and regulations often come to represent many

4

• competing goals, and keeping things simple, is
  simply not possible.
• The politics behind the tax system
• There are always going to be politicians who
  strongly support the subsidising of taxes for
  certain groups of people or for certain
  activities, and these serve only to complicate
  the system further by creating and upholding many
  distinctions among tax payers and uses of income.
  Pressure from activists campaigning for taxes to
  remain the same, has seen many Congress members
  sign a pledge to do exactly that, meaning that
  lowering taxes for some taxpayers, only
  complicates the system further. If any changes
  are then made to the tax system which results in
  them

5

• being raised in the process of simplification,
  then they must be offset with another change that
  lowers them back again. Thats about as
  complicated as things can get, believe me!
• Other goals that complicate US tax laws
• To deter people from trying to avoid paying their
  taxes, there does have to be an element of
  complexity. While taxpayers have every right to
  try and lower their taxes by any legal means, in
  doing so, certain questions are raised regarding
  whether some activities or outgoings qualify for
  tax-preferred status. Limiting tax avoidance is
  something that The Treasury Department have
  responded to with a

6

• set of new rules and laws, but of course some
  taxpayers have found ways to dodge these, and the
  never-ending cycle of avoidance and conflict
  continues unabated.
• The landmark Tax Reform Act of 1986 was an
  incredible accomplishment, in that it sacrificed
  efforts to simplify matters, just to meet a goal
  of revenue neutrality, something that sparked
  many complex phaseouts and hidden taxes to meet
  federal and state targets.
• So, it seems that our taxes arent likely to get
  any less complicatedin the near future, and if
  understanding them all is proving too much for
  you, why not call on the services of a
  professional company who can guide you through
  the US tax systems murky waters.

7

• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax preparation service
  Coral Gables. If you are looking for tax
  preparation service in Miami, Heyer Associates
  would be a right option.