Opposing view: ‘A significant step toward a simpler code’

While much attention is paid to the burdens of paying taxes, often overlooked is the burden of filing taxes. In total, taxpayers spend nearly 7 billion hours just to comply with the current tax code, an amount of time worth $263 billion. Because making sense of forms and tax regulations is borderline impossible for most, nearly 90% of taxpayers use a paid service to complete their taxes.

Thankfully, relief is on the way. The Tax Cuts and Jobs Act will simplify the code and make it much easier for millions of Americans to file their taxes. A key component of the plan would nearly double the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.

Currently, 30% of filers itemize their taxes, which piles up mountains of paperwork. With the higher standard deduction, the number of itemizers will drop to less than 8%, meaning more than 30 million taxpayers will save time that was previously spent organizing receipts and records.

The IRS estimates that it takes an average of 15 hours to complete the

1040 form, and that it costs filers $280 on average for out-of-pocket expenses preparing the return. If 30 million filers are able to switch to the simpler 1040A form, they would save an average of seven hours and $190 in costs.

Analysis of data by the National Taxpayers Union Foundation estimates that the drop in itemizers alone will save 210 million hours in compliance burdens, which equates to a savings of

$13 billion.

Additional reductions in complexity for individuals would come from raising the threshold of the dreaded estate tax and reducing the impact of the individual alternative minimum tax. For businesses, repealing the corporate AMT, simpler cost recovery and increased cash accounting will make compliance much simpler.

The Tax Cuts and Jobs Act will not solve tax complexity in one fell swoop, but it represents a significant step toward a simpler code.