The new healthcare bill mandates that all Americans must have health insurance, and the Internal Revenue Service (IRS) is charged with enforcing that mandate.
The IRS will have to hire between 11,800 and 16,500 new employees to manage its new responsibilities, according to analysis by the Minority of the House Ways and Means Committee.
The IRS’s budget is over $12 billion. The Congressional Budget Office (CBO) has estimated that the IRS budget will have to grow by as much as $10 billion to pay for the additional work.
Yet the cost of employing these federal workers is small compared to the cost Americans face in complying with the more than 9,000-page tax code, in terms of lost time and revenue.
In 2009, Americans spent an estimated 3.8 billion hours complying with income tax laws at a cost of $110 billion. Americans also spent nearly $30 billion for help with their taxes – from buying software to paying professional tax accountants. This means that the average American taxpayer spent 26.4 hours and nearly $200 preparing their taxes.
As Bankrupting America has reported, the IRS Commissioner Douglas Shulman himself pays someone else to do his taxes because he finds the tax code too complex.
Just as individuals lose time and resources to the individual tax code, businesses spent nearly $160 billion in 2009 to comply with the tax system.
Yet the tax code continues to grow more complex. Between 2008 and 2009, the average time spent on taxes for an individual taxpayer went up by a full hour. The new health care bill – and its expansion of the IRS – will add to the problem.
