Opinion: Happy Taxes!

Written By Unknown on Minggu, 14 April 2013 | 13.25

HOW many millions of hours do you think Americans spend on government paperwork every year?

The answer is staggering. It is measured not in the millions of hours, but in the billions — 9.14 of them, to be exact. Suppose that we value one hour at $20 (a conservative estimate). If so, the government imposes an annual reporting cost of more than $180 billion on the American people.

That figure is more than 20 times last year's budget of the Environmental Protection Agency, more than seven times that of the Department of Agriculture, and more than six times that of the Department of State.

Large as they are, the numbers do not capture the frustration experienced by countless individuals and small businesses, which are required to grapple with long, complex and sometimes barely comprehensible forms.

Dozens of government agencies impose significant paperwork burdens, but one stands above all others: the Department of the Treasury. That department accounts for 6.7 billon annual hours, which is nearly 75 percent of the total. No other agency accounts for more than 6 percent. The Department of Health and Human Services, the Department of Labor, the Department of Transportation and the Environmental Protection Agency impose big reporting burdens, but in each of these cases, we are speaking of millions of hours, not billions.

The Treasury Department is the national paperwork champion for one reason: It houses the Internal Revenue Service. As Congress starts to explore tax reform, it should begin with a project that ought to attract bipartisan support: a focused effort to slash the immense paperwork burden imposed by government in general and the tax system in particular.

There is reason to be hopeful. From 2009 to 2012, I led the White House Office of Information and Regulatory Affairs, which oversees the Paperwork Reduction Act. (Yes, there is such a thing.)

As part of President Obama's continuing effort to streamline regulatory requirements, we took a series of quiet but aggressive steps to cut pointless red tape. In the last decade, the estimated paperwork burden peaked between 2007 and 2009, and while it remains far too high, we were able to chip away at it.

The Occupational Safety and Health Administration is not exactly famous for eliminating regulatory costs, but in 2011 it removed 1.9 million annual hours of unnecessary burdens imposed on employers. In 2012, the Department of Transportation saved truck drivers 1.6 million annual hours by eliminating a requirement to file redundant inspection reports. The Department of Education has undertaken a series of efforts to simplify the process for filing the Free Application for Federal Student Aid, removing 5.4 million annual hours of burdens imposed on students and their families.

More ambitiously still, government agencies recently identified more than 100 new paperwork-reduction initiatives, which are anticipated to eliminate some 100 million hours in annual burdens.

IN the area of taxation, Congress has imposed a lot of reporting requirements, sharply reducing the ability of the I.R.S. to streamline the system. And yet the I.R.S. has taken important steps to simplify the annual tax process. Its form 1040EZ allows people earning less than $100,000 to file their taxes with a straightforward one-page form.

The I.R.S. has also announced a far simpler way to assess the popular home-office deduction. More than three million taxpayers claim this deduction, which has long been time-consuming to calculate. The new approach is eliminating 1.6 million hours in annual burdens.

Moreover, the I.R.S.'s ambitious initiative to simplify reporting for capital gains and losses, recently announced though not yet implemented, will allow taxpayers to report summary information without providing unnecessary line-by-line details for each transaction — saving 19 million hours in annual reporting burdens.

Still, the I.R.S. could do far more. It could encourage many more taxpayers to take advantage of its current efforts to allow them to substitute electronic filings for paper ones. It could increase the use of shorter, streamlined forms (some of these are already available), and it could coordinate and consolidate redundant or overlapping requirements.

Some economists, including Austan Goolsbee, a former chairman of the Council of Economic Advisers, have proposed a more ambitious plan: Tax authorities should allow automatic tax returns. They would use the information they already have to send eligible taxpayers fully filled out returns, asking for only a signature and the correction of any errors. California is already using such an approach with a program called Ready Return.

For all the talk about tax simplification, Congress has paid disappointingly little attention to paperwork burdens. But Democrats and Republicans should be able to agree that nine billion hours are far too many. Let's do something about it.

Cass R. Sunstein is a former head of the White House Office of Information and Regulatory Affairs and the author, most recently, of "Simpler: The Future of Government."


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