One Man’s Compliance Cost Is Another Man’s Income

Most people probably appreciate that complex tax laws constitute the raison d’etre for several professions, including tax accountants, tax lawyers, and most financial advisers. I would be extremely surprised to find lobbyists for these professions engaged in supporting tax-simplification legislation.

Each year, my accountant sends his customers a tax planner with a cover letter. This year’s letter includes the following paragraph:

There are many new tax laws this year. Every one of the Stimulus, Reform, Recovery, Correction, Relief, Equity, Protection and Prevention Acts contains hundreds of pages of tax law changes. My favorite is the Heartland, Habitat, Harvest & Horticulture Act of 2008, which changes the depreciation rules for race horses. We have reviewed them all and are prepared to take you through this complex mess. It’s not that confusing after you remove the exceptions to the exceptions. IRS is not smart enough to make it really hard.

I have been doing business with this accountant for about thirty years, and in that time his letters have always ended with the same words: God bless the IRS.

Robert Higgs is Senior Fellow in Political Economy at the Independent Institute, author or editor of over fourteen Independent books, and Editor at Large of Independent’s quarterly journal The Independent Review.
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