Everybody dreads doing their taxes, spending hours and hours filling out forms and double-checking numbers.
In fact, Americans spend a whopping 60 billion hours a year on taxes. And while the average American spends 30 hours filling out taxes each year, in many other countries, it only takes 15 to 30 minutes.
And the shortcomings of the U.S. tax system don’t stop there. T. R. Reid, author of "A Fine Mess: A Global Quest for a Simpler, Fairer, and More Efficient Tax System," says Americans spend $10 billion dollars a year on tax preparation and another $2 billion on tax software. But despite all of this extra time and spending, America’s tax system is still not as fair and equitable as those of many other countries.
According to Reid, a major problem with our current tax system is that it has too many loopholes and deductions, which tend to favor the wealthy. To fix that, Reid says we should do what lots of other countries have done and get rid of tax exemptions, even popular ones like the mortgage interest deduction. Without all of the giveaways, you could lower interest rates for everyone … a very popular idea.
What else can we learn from the way other countries handle taxes? Well, some governments basically file taxes on behalf of their citizens. Taxpayers just check over the numbers and, if everything looks right, they hit the “OK” button, and they’re done for the year.
Reid says that in Japan, taxpayers get a postcard with their tax information on it. In Chile, the IRS has a mascot for taxes named Ivo the Chinchilla, who lets people know what their tax money funds.
So, is our government on its way to creating a better tax code and a streamlined way of filing taxes? Reid says time is on our side: roughly every 32 years, our tax system gets too complicated and must be revamped. The next 32-year mark next rolls around in 2018.