The big news this week as far as federal government machinery was the Treasury Department’s Monthly Treasury Statement, revealing that the federal government receipts topped $3 trillion in for the first time ever in fiscal year 2014 (which just ended on September 30).
$3.021 trillion is this new high point, a quarter-trillion higher than the year before.
The deficit, which had touched a trillion dollars in recent years, was $483 billion (We spent $3.504 trillion).
The corporate income tax needs reform, to be sure, but we’ve noted the outsized attention the corporate income tax of a few hundred billion gets compared to the federal government’s regulatory intervention costs of nearly $2 trillion annually (probably far more, but this figure is a baseline).
The new Treasury report coincided with a recent column I wrote about the 9.4 billion hours of paperwork the federal government bestows upon citizens. The bulk of that, 7 billion, is attributed to the Treasury Department, primarily driven by tax compliance.
Earlier studies of the costs of overall tax compliance, the deadweight costs and sheer economic waste, postulated several percent of GDP, or hundreds of billions of dollars. Surveying such material I reckoned $329 billion as a placeholder for those costs, noting also that, assuming $47 dollars an hour for compliance personnel to deal with the 7 billion would be all it takes to reach that height (but costs encompass more than salaries, of course).
Note something interesting; that $329 billion exceeds the $321 billion that the Treasury Department reports as what is taken in by via corporate income tax receipts.
Corporate income tax reform is needed; it's a priority. But the greater problems are over-regulation and too much paperwork and red tape. Simplification and common sense, all around, is needed.
