Tax Day Is Monday: 23 Outrageous Facts About Taxes That Will Blow Your Mind
The U.S. tax code is over 3 million words long. Each year, Americans spend billions of hours and hundreds of billions of dollars trying to comply with federal tax requirements.
The tax code is absolutely riddled with loopholes that big corporations and the ultra-wealthy use to minimize their tax burdens as much as possible. Many poor people do not pay any income taxes at all. The dishonest are rewarded for cheating on their taxes (if they can get away with it) and the ultra-wealthy have moved trillions of dollars to offshore tax havens where they can avoid U.S. taxation altogether.
The following are 23 outrageous facts about taxes in the United States that will blow your mind:
1. The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2. According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3. 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4. There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5. According to the National Taxpayers Union, the IRS currently has 1,999different publications, forms, and instruction sheets that you can download from the IRS website.
6. Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7. In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
8. The IRS spends $2.45 for every $100 that it collects in taxes.
9. According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.
10. When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.
11. Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.
12. The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.
13. According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14. Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15. The top 20 percent of all income earners in the United States payapproximately 86 percent of all federal income taxes.
16. Sadly, as Bill Whittle has shown, you could take every single pennythat every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
17. The United States has the highest corporate tax rate in the world (35 percent). In Ireland, the corporate tax rate is only 12.5 percent. This is causing thousands of corporations to move operations out of the United States and into other countries.
18. Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
19. In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.
20. Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government.
22. Many wealthy Americans hide enormous amounts of money outside the country in order to avoid paying taxes. According to the IMF, a total of 18 trillion dollars is currently being hidden in offshore banks.
23. The number of traffic accidents spikes each year right around April 15th. The following is from a recent Bloomberg article…