Kitchen Table Economics

Tax Day Proved Taxing for Americans

Tax Day 2016 came and went, but it didn’t leave taxpayers unscathed. According to the National Taxpayers Union Foundation (NTU), federal tax filings cost Americans 6.1 billion hours of preparation time and over $234 billion in compliance costs. For perspective, that’s more than the gross domestic product (GDP) of Israel.

Of that $234 billion, almost $65 billion is attributable to lost productivity from 1.9 billion hours spent filling out 1040 forms. Another $29.6 billion was spent on software, tax preparation fees, and other filing costs. All of that money pays for a massive bureaucracy: The government’s tax compliance arm is nine times larger than the active-duty U.S. Army and more than double the active and reserve members of the entire armed forces.

The report concluded that America’s total tax bill came out to $4.99 trillion—$3.3 trillion of it in federal taxes. As we’ve mentioned before, that’s more than Americans spent on food, clothing, and housing combined.

Both employees and employers are affected. A recent Job Creators Network poll found that two-thirds of business owners claim high taxes threaten the viability of their business. And a Small Business Administration survey concluded that the majority of them spend more than 40 hours a year dealing with federal taxes—without even considering state and local taxes or government regulations.

This ultimately hurts job-seekers, since job creators are left with less time (and money) to expand their business and hire more people.

For more information about taxes, watch some of our videos here.