The concept of a “fair tax” and possible dissolution of the IRS as promoted by certain Presidential candidates has created great excitement. As stimulating, refreshing and sensible as both may be, I’m afraid there is at least one (ignored) reason why neither will happen in the foreseeable (like, forever) future. Consider:

  • The IRS has 91,717 employees (source: IRS 2006 Data Book) with the force and weight of law relieving us of the fruits of our labor at a cost of $10.882 billion (source: IRS 2006 Budget).
  • We are paying $4,128,662,000 to 19,242 tax preparation services with 205,122 employees to help us relieve ourselves of the fruits of our labor (source: 2002 Economic Census*).
  • Ditto for a substantial portion of the $48,497,646,000 we pay to the 56,705 Certified Public Accounting firms with 426,208 employees (source: 2002 Economic Census*), granted, CPA’s do other things besides taxes.
  • Never mind the multitudes involved in litigation, ancillary services, or contracted/outsourced services (primarily by the IRS), which are undocumented and therefore indeterminate.

* The Economic Census is conducted every 5 years. The 2007 data is not yet available.

Tallying the numbers above it takes 723,000 people (jobs) at a cost of $63 billion per year just to pay our taxes. One shame of these statistics is that (I surmise) those jobs and that money are, to a great extent, included in the rosy job and GDP numbers that we hear regularly. I’m sorry, but I don’t see how 723,000 people and $63 billion collecting taxes is adding value to the economy. Value is added to the economy when we spend of our own freewill, not under force of law, never mind the insult of the nature of the expenditure.

723,000 jobs
$63 billion
They won’t go quietly.

Chuck is self-employed in agri-business in Virginia. He can be contacted at chuckangier@gmail.com

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