神马文学网The Complexity of the U.S. Tax System
来源：百度文库 编辑：神马文学网 时间：2024/04/20 00:05:56
The Complexity of the U.S. Tax System
As you already know the U.S. tax system is complicated. So complicated that in 1913 the tax code was 400 pages and today it’s 70,320 pages long. But instead of me rambling on for hours, I thought it would be fun to explain the complexity of the U.S. tax system in a visual format.
{ 6 trackbacks }
- uberVU - social comments
- February 18, 2010 at 9:37 AM
- The Complexity of the U.S. Tax System [Infographic] | GoodFinancial.info
- February 18, 2010 at 7:12 PM
- Aaron Fanley - The Complexity of the U.S. Tax System [Infographic]
- February 19, 2010 at 7:26 AM
- The Complexity of the U.S. Tax System [Infographic] « Pkrf1end’s Blog
- February 19, 2010 at 10:56 AM
- Interesting Reading #423 – Cheap EV skateboard, best shower heads, Lake Vostok soon to be uncorked, NASA’s new rover, How Curling Works and much more… – The Blogs at HowStuffWorks
- February 21, 2010 at 7:31 PM
- The US Tax System is Complex
- February 24, 2010 at 5:57 PM
{ 163 comments… read them below or add one }
- Steve February 18, 2010 at 9:45 AM
I wouldn’t mind knowing how the 16.3% avoid paying taxes during the year. They must live off of tax free investments, cheat, or shelter their income in some way.
Reply
A lot of people cheat the system… it’s just a matter of time before they get caught.
Reply
- Some Guy February 18, 2010 at 6:24 PM
The truth of the matter is, a tax cheat is not likely to be caught unless they’re appointed to a cabinet position and the press takes a close look at them. The IRS just picks people at random to harass to keep everyone else scared.
Reply
- cb February 19, 2010 at 9:01 AM
Many were caught as they were appointed by Obama to his administration. Even Rangel, who rights the laws has been caught cheeting.
Reply
Corrupt only begins to describe some of the techniques being used by some lawmakers lol.
Reply
- catalin p March 3, 2010 at 6:04 AM
This post again reminds me of the saying: “Don’t steal, the government hates competition”!!! I think this is the most appropriate post for this harsh reality
The truth is that people are often incapable of paying their taxes, and not they are really trying to cheat the system. You can’t cheat the system because the system cheats us all!!!!Reply
- Al L. March 7, 2010 at 2:56 PM
“Don’t steal, the government hates competition”
Love that line.
Reply
And some of that group are the people that use what the IRS calls “frivilous” arguments to avoid paying or having taxes collected from them.
Reply
I’m sure most of it is as pedestrian as people not reporting income or making so little as to not report it.
Reply
I’m pretty sure by evade they meant, pay less taxes than due, most likely by undereporting income or overreporting deductions.
Reply
They cheat because it’s a resume enhancement to get in bed with the Obama administration.
Reply
- 0t February 19, 2010 at 8:01 AM
The IRS reports a common way of “cheating” is subcontractors who don’t have withholding and underreport by overclassifying personal income as business expenses, etc.. Lots of people “cheat” and don’t know about it… paying someone for services out of pocket almost always results in underreported revenue.
Reply
lol…. yeah that maybe a good way to look at it
Reply
It is really disgusting 
Reply
Great visual interpretation of the US tax system.
Yep, I’m one of the 60% who have someone else prepare my taxes. It’s worth it if it’s saving me 24.2 hours. It also gives me piece of mind to know that someone who specializes in tax preparation will back me up just in case the IRS comes knocking on my door.
Reply
- yo mama February 18, 2010 at 4:34 PM
Does it really take 24 hours for your tax man? Is he charging you (24 * 100) to do your taxes?
Reply
- ejb February 18, 2010 at 9:10 PM
no, thats why it’s called specialization.
Reply
I agree with you, it’s just a lot of stuff to put on your plate to deal with yourself.. it’s something thats worth you paying a little bit extra to do.
Reply
Nice picture/ Diagram. Its interesting how people view taxes so differently and what “tax time” means to different people.
Thanks
Reply
No wonder i see so many new tax places quickly sprout up at this time.. I bet most of them will close shortly after April 15th.
Reply
Wanna hear something crazy? I haven’t paid a single penny in federal income tax since getting married… 14 years ago. In 2009 I earned more money than I ever have in my life (about a third of which was from self employment), yet had enough tax credits that I still didn’t pay one cent in income tax. In fact, I’m getting the biggest “refund” (a misnomer since I never paid into the system) that I’ve ever gotten… more than double the average refund as indicated by your graphic. And it’s not like I’m poor and must therefore rely on social programs to get by (though I have been there and done that). I make enough money that I own a (modest) home, two cars, and am able to comfortably support my wife and three kids. An interesting addition to your graphic would be the number of “taxpayers” like me who don’t pay taxes.
Reply
- Jimmy February 18, 2010 at 4:29 PM
It’s because of people like you that Americans can’t have nice things.
Reply
It’s a bit more than that
Reply
- Mike February 18, 2010 at 5:22 PM
Wanna hear something else thats crazy? By not paying into the tax system, you help increase the massively growing national debt, because our government system fails to understand that by spending less they can make more, which your sticking onto your kids. What a great dad, shafting your kids financial future and proud of it.
Reply
- Jake February 18, 2010 at 5:30 PM
The effect of changing the marginal tax rate has never been shown to directly change macroeconomic trends.
Reply
- eBay Money Guy February 25, 2010 at 6:37 PM
Uhh… not proud of it. That’s why I said it was crazy.
Reply
So we are all to believe that not only did you “not pay” into the system, you are so clever that you managed to get the IRS to GIVE you over $5400 on top of your earned income?!? Math FAIL, moron. Go back to 1st grade and get a refresher on subtraction.
It’s quite clear that you are nobody special, doing nothing special. Taxes were taken out of your pay, you have lots of write-offs (including a gaggle future math FAIL moron ankle biters, I’m sure), and now you’re getting some of your tax money back. Whoop-dee-doo. Welcome to America.
Here’s a fun exercise for you: Have someone add up all the money you made last year, then divide by the number of actual hours spent earning it. Knowing how time consuming and little profit there is to be made on eBay, I would guess you averaged about $10/hour last year for your trouble. Idiot.
Reply
- Matt Czarnek February 21, 2010 at 2:30 PM
Well it’s a perfect example of why the government loves withholding so much
Reply
- eBay Money Guy February 25, 2010 at 6:27 PM
Wow! Well, I caused quite a ruckus, didn’t I? I’m not bragging about it, and I’m not the one that wrote the tax laws. And I never claimed to be anyone special. All I did was buy Turbo Tax and plug in my numbers. At what point did I claim to be this special guy you talk about? I stated that I thought it was crazy, and had a question which I thought to be completely innocent. Didn’t realize I was calling the wrath of presumptuous angry people upon me. Sheesh! I’ll take cover next time I make a statement or ask a question on here *breaks out steel umbrella*
Reply
It’s not very crazy, there are certain things you’re doing which may benefit you, but badly hurt others… I’d be careful.
Reply
- eBay Money Guy February 25, 2010 at 7:00 PM
I’m a regular guy with a regular job who gets a regular paycheck with withholdings based on what I fill out on my W4 each year (my website is a side project and I’m lucky to make $50/year from it — in a past life I sold over 10,000 items on eBay, and I created my website years ago just to share my knowledge after I quit selling online). So no, I’m not anyone “special” nor have I ever claimed to be.
Well, turns out that if you are married, have one income and three kids, you have 12 exemptions. So that’s what I claim each year. While I pay state tax, medicare, social security and obviously pay property tax, sales tax, gas tax etc., I haven’t, since marrying, had federal income tax withheld from my paycheck.
Each year I buy TurboTax and plug in my info. Each year it says I don’t owe any federal income tax. Each year, I’m “poor” enough to claim EIC. Each year I claim my 3 kids for the child-tax credit. There have been a couple years I paid a self-employment tax, but that’s it. So I guess if you count that, I have paid income tax a couple of years, but not enough to cancel out the credits.
It’s only been a few years ago that I was below what the government considered the poverty line, so I’m very glad to not be there anymore, and I keep expecting at some point that I’ll start paying a federal income tax. But every year the IRS adds a new credit. Like I said, I think it’s crazy. But if the IRS says I don’t owe, well, then I’m not going to pay. It’s not out of spite.
I didn’t write the tax laws. So to say that I’m the one hurting people by doing my taxes the way the law says to do them, well, perhaps we ought to vote for better lawmakers.
Reply
Awesome visual! Great job in presenting such complex (and wordy) material into an easy to read (and fun) format. This is so outside the box I love it.
Reply
Yup.. That’s why I support the FairTax. My first website was http://www.TaxItFairly.com
Another thing that would be interesting is how much is paid to get someone else to calculate their taxes and how many jobs could be used other places.
Reply
- Brian Armstrong February 18, 2010 at 9:30 PM
I’d support something like that…or the alternative minimum tax (AMT). No doubt the tax system in the U.S. right now is severely broken.
Reply
Easily understandable. btw did u do the graphics or hire someone?
Thanks.
Reply
Excellent graphic, I hope you do more of these. People are so lazy they waste money on tax services when you can download fill-in pdfs from irs.gov for free! Takes no more than 30 minutes if you’ve been keeping records. If you’re self-employed it’s only 2 forms in addition to the 1040: schedule C and SE.
Instructions are all there, costs .44 postage. Any deductions those pros tell you about you can figure for yourself- and if they’re shady deductions it’s you that gets audited, not them.
Reply
Taxation without representation is unfair.
Don’t re-elect anyone. Abolish the tax code and put government back to the limited roles that only it can play, those with which it can cause the least damage.
Reply
- Steve February 18, 2010 at 7:14 PM
Yes. Thumbs up.
Reply
nice diagram, actually 70% of all fortune 500 companies in america have offshore banking, here is a list of all of them who pay very minimal tax http://www.opentopix.com/topic/business/fortune-500-companies-that-have-offshore-accounts-and-dont-pay-taxes
Reply
- Blake Waddill March 1, 2010 at 9:18 PM
I’ve heard that the majority of big earners have offshore methods to reduce the amount of tax they pay. Even John Chow wrote some pretty interesting articles about how to do this a couple of years ago.
The loopholes that people find are what have turned tax law into the giant mess it has become.Reply
- Al L. March 7, 2010 at 3:14 PM
“The loopholes that people find are what have turned tax law into the giant mess it has become.”
Isn’t that the same with most anything requiring rules and regs? There is a reason that business directors do PESTEL analyses, after all. When the 60% hire someone to do their taxes, they are not doing so to ensure they pay every penny that they can. I think most would fire their accountant in a heartbeat if s/he did not save them more than s/he cost. Loopholes are a natural consequence of that process…
Reply
Hey Neil,
I’ve been seeing these visual representations of statistics a lot lately and I think they are pretty cool. Can you tell me how you made this?
Reply
It is drastically messed up that is for sure. I reported $11000 in income and cause all the tax credits I get $6000 this year.
Are 16% really evading taxes, or have they just legally evaded through a loop hole? I remember Obama naming a loop hole as tax cheating, but it is 100% legal. That is what a loop hole is.
Too bad taxes are going to go up. We are taxed 2.5t yet the gov. Spends what 4.1t.
Reply
- John February 18, 2010 at 5:11 PM
All the more reason to not live in the US.
Reply
I wish you would have included how much, on average, they spend on the tax services, too…that would have brought it full circle!
Reply
There aren’t that many loopholes. A great one was converting a rental unit to residential by living in it for two years and getting the section 121 exclusion on the gain. The IRS has finally plugged that one up. And the Alt Min supposedly takes care of a lot of the others. The people who aren’t paying their fair share are pretty much just lying on their returns. And don’t forget your fees paid for preparation are deductible.
Reply
Very impressive statistical data. It so sad that the Tax keep on increasing every year. The Fed Goc is getting richer every year I suppose
Reply
Incredible, isn’t it? The government taxes almost every single legitimate exchange of goods between any two entities. Every payroll check gets a chunk taken out of it, every gallon of gas purchased, (if you live in New York) every MP3 downloaded.. Even when you die, the government takes ~40% for your trouble.
Yet we have a $12 trillion debt. And there are people out there that want to raise taxes. Seriously, I’m not kidding.
Reply
I’m tired of being punished for not reproducing.
So I pay MORE tax because I’m not supporting a brewed of brats?
I think people getting tax cuts for populating the planet is B.S. I don’t get any breaks for not adding one more child to the ‘public’ education system. Nor am I adding strain to the planet!
Reply
Wow ..just 10-15% in tax…here in Australia we are ripped off..26% tax at that kind of income.
Reply
This is really crazy. 82800000 taxpayers are paying someone to prepare their taxes and for each of them it will take a day (24 hours) to do their tax return.
This is way too much!!
Reply
Well… I’d have to say that a majority of tax evasion is done by small businesses or self-employed citizens. How would the government ever know if you earn cash and keep it in a safe? No bank… nothing… I’d say most business only claim what they can’t get away with such as: credit card payments, checks, and bank transfers :/
Reply
Believe me, the U.S. tax rate is still a hell of a lot better than in Canada or the UK. As for cheating and loopholes, have a look at this article, which points out how GWB’s administration hid the low tax rate of the richest 400 Americans:
http://www.salon.com/tech/htww/2010/02/17/richest_americans/index.html
Reply
Thanks for the explanation, I am not from USA and I a few day ago I was wondering how is US Tax System working. Thanks again!
Best Regards!
Reply
Use TurboTax and it will take you less time… and less money.
Reply
24.2 hours on average (!!!), that’s over 60% of a 40 hour work week–just to prepare taxes. There needs to be an extra deduction added in just for the time spent filing based on your wage or something… If I make $340 a week after taxes, I should get an extra $205 in deductions for filing taxes, just due to the fact the system is so complicated it takes that long for an average individual to file… jesh. Yea, the proposal is ridiculous but so is 24.2 hours for something that shouldn’t be that complicated.
Reply
I’m sorry, I don’t really understand how this is a “visual representation” of the federal tax system. It’s just a few random statistics placed over some loosely relevant graphics. It doesn’t seem to me that the data interacts with the “visual” aspect in anyway. Anyone could have pulled these very basic numbers and placed them over some origami dollar butterflies…. very underwhelming and disappointing
Reply
I am a home owner with an income over $200,000, children, an investment portfolio (capital gains), give considerably to charity and I was able to get through my taxes in under and hour with the aid of commercial software which costs $40. Without that software it would be unimaginably comlplex, but because that software exists (and my income gives me access to it) I really don’t see the problem with the code. Is is complex? Of course, the world we live in is complex. I guess the only real advantage I would see to a simplified code would be to reduce the number of employees in the government required to administer it and check all the returns. I imagine something like a national sales tax would require almost no overhead.
Reply
I did my tax return in an hour and a half. It was pretty chill.
Reply
Awesome. I just learned a lot. Visual systems rock. After all my over seas travel I really began to appreciate America a lot more. Although not a perfect system I see what our tax system affords us. I do believe you should take every legal tax credit you can get. I work hard for my money so keeping as much of it as I can is no problem for me.
Reply
I agree with you on taking advantage of every credit possible… every penny counts in my books
Reply
I’m sure the contributing demographic that dominates that 16.3 is the 18-22 year old. Not enough money to be noticed, but enough where they are required to file.
Reply
- Christoph February 19, 2010 at 8:58 AM
Read it again, Sam. That 16.3% accounts for $345B USD or 2.6% GDP. So in the aggregate, yes, this has a significant impact on our social system; the US DoD budget is (not counting our “overseas contingency experiment” is about $550B USD.
Reply
- Write More February 19, 2010 at 9:06 AM
The earned income tax credit pays some Americans (mostly lower income working families, single head of household) more than they paid that year in taxes.
I couldn’t believe it the first time I got it. I had been doing my own taxes and never filled out the EITC form because I was already getting back all I paid in to federal taxes. I didn’t think you could get more than that back.
It’s not tax evasion, and if you don’t know you’re entitled to it – your loss.
Without my accountant, I would have left thousands on the table.
Reply
I didn’t know you could sum up the tax system, at all.. not just on a website, but at all.. too many holes
Reply
Dont worry Indian tax system is equally complicated but you can call yourself a farmer and run away from paying taxes.
Reply
So i had dinner with my wife and wrote it off as a business expense…. the gov’t can suck it!
Reply
lol…. yeah. I think many people are guilty of that
Reply
A few quick points. This is broad brush data. Neil only accounts for 97m taxpayers. I assume we are excluding corp taxes. We are missing 745b somewhere. You lump every1 in 200k or more and 50k or less categories. This brings the average rates way down or up as case may be.
I’m no fat cat and I pay a dam lot more in Fed taxes (let alone State property taxes) than 20-25%.
On the flip side there are many people who struggle on 10-20k who pay little or no tax (as they should). By breaking down teh brackets we can see more clearly the tax ‘burden’ carried by each group/demographic, tax bracket.
For the folks who think EVASION is the same as minimization your wrong.
EVASION is illegal Minimization is legal. You work the complex 70k pages to your advantage. COming from Australia I am stunned at how low taxes are here, and yet how complex the system is.
I still believe that if you let people keep more of what they earn for each hour worked that they will spend/save it better than a bureaucrat will allocate it.
The man who is avoiding/evading taxes likely does the economy good on one hand: He spends proportionally more per dollar earned, which increases M1(more money for banks to lend), buying goods and services which aids production, which creates jobs.
…..anyway great Graphic, I’d love to see a more detailed version.
Also why not have comment tracking? Its a drag to check in to see if my post was commented on, I’d rather get a text or email for it.
Reply
Interesting stats. Like some others, I don’t know it cheating is the right word for the 16.3% that avoid paying all or some taxes. I believe it comes down mainly to the complexity of the code. Make it simple and it will be easier to control with less abuse.
Reply
Heritage Foundation claims that the bottom 50% of American earners pay no taxes at all, and that an inordinate share of the tax burden is borne by the top 5%.
Tax evasion encompasses a lot of thing and most of us have engaged in it. For example, holding a garage sale and not reporting the income or paying sales tax would qualify as tax evasion in many cases. Earnings or gambling winnings of under $600 in a one-year period aren’t reported by the payer to the IRS, and so many taxpayers routinely don’t report such income. Cash transactions often don’t generate tax information or payments.
The brutal fact, though, is that not only do Americans individually pay that much in taxes, they also, indirectly, pay all the taxes paid by every company that pays any sort of tax. As to complexity, consider that in addition to the national tax burden described above, most Americans also have to deal with a sometimes bewildering maze of state and local income, sales, property and other taxes.
I say scrap the whole system, repeal the Sixteenth Amendment and adopt the FairTax!
Reply
With all due respect, don’t quit your day job, Neil. Not an impressive example of data visualization…
Reply
The graphics of your story do not tell a story themselves. this is just the bullets of an article over some unrelated graphics. The graphics of an infographic should also tell a story, such as this one: http://xkcd.com/681/
This shows not only textual data, but if you analyze the graphic you can learn things as well. Here is another example http://contexts.org/graphicsociology/2009/04/09/what-does-one-trillion-dollars-look-like/
The point is, and infographic needs to help you visualize the data presented.
My suggestion is that if you want to show how complex the tax code is, compare how it all relates in say leaves of a tree. Each requirement or each idea would be a different leaf. Then compare this tree to leaves of a tree depicting driving laws, or something. Since this is probably difficult, how about simply showing what 70,000 pages look like compared to a standard law document.
Bottom line: the graphic should help you understand the data.
Reply
Gee, with over 70,000 pages – how could you NOT be breaking some sort of tax code? Hiring someone will just help at the audit so you’ll have someone there who is more knowledgeable than the assessor!
Great graphic, Neil
Reply
I’m an American living in France so I get to see 2 tax systems. US is by far more complex than the US.
I only file in the US every 5 years or so because I am not taxable in the US, but I still have to file. For me, there are 2 forms I have to file, the 1040 and the foreign earned income (I think form 255). The foreign earned I declare how much I made and how long I was out of the US. On the 1040 I declare how much I earned and deduct the sum on the 255, which is all of my income. US taxes take about an hour, once every 5 years.
French taxes are even easier – how much I earned, the automatic 10% deduction for expenses, how much I paid in child support and sign the form.
Reply
Hiring someone will just help at the audit so you’ll have someone there who is more knowledgeable than the assessor!
Great graphic,
Reply
Has anyone wondered why there needs to be 70k+ plus pages of tax laws? seems like a scam to me. If they were honest about it they could fit it on about one page. or even a few lines.
“Pay X amount based on your income or we kick in your door kill you and your family then take all of it any way”.
Reply
The tax system can be boiled down to ignorance. The ignorance is of the “tax payer”. One that fully understands tax law will never pay income tax on private sector monies in the US because it is never stated anywhere that the private sector is obligated to pay income tax. People in general, the blog writer included, believe that the IRS and its “laws” apply them them when in reality the the Internal Revenue Code can only apply to employees of a government within the US, a territory of the US, or a district of the US, including employees of the federal government. Ignorance is easy.
Reply
That wasn’t complex at all. Pretty simple really.
What I find confusing is why so many people seem to assume that a lot of pages of tax code (or health care bill for that matter) automatically means something underhanded is going on. Whenever you’re dealing with policies or regulation that will eventually be challenged in court there is going to be a lot of ink spilled on making everything as detailed and loophole free as possible. It’s basically a ton of legalese designed to cover every conceivable issue that can come out of every conceivable situation.
My point is having 70k+ pages of tax code is not necessarily a bad thing. The economy has grown tremendously since 1913, new industries requiring special regulations have sprung up, as well as new sources of revenue. Having 1 page of tax code would be disastrous since obviously the lack of detail and regulation would leave a lot of room for cheats and crooks as well as hinder the IRS’s ability to prosecute.
Sounds like a good thing until you realize tax cheats are basically stealing from those of us who do pay.
Reply
I can’t believe how little tax Americans pay! This makes it even more unbelievable when some of your politicians start railing against heavy taxation!
Reply
- catalin p March 3, 2010 at 12:43 PM
Compared to other countries the Americans pay a lot less…What about countries that ask for taxes of around 25-30% while the average salary is 250$?
Reply
The way you have used the imagery makes the tax system in US so easy to understand..I don’t know why the authorities make them complex!!
Reply
People can change their identity, what they really are when they’re in a public or for a short period of time, but eventually everyone take their masks off.
Reply
Those last few items, IMHO, are why we will never go to a comsumption-based tax system – too many people make a living on our tax code complexity!
Reply
Tax is a sensitive subject. When government still wants up to 25% of your nett income, after you’ve already paid out huge chunks of cash on everything from VAT, through to levies on fuel and luxury goods it stings when they still want more….
Reply
That’s an interesting way of explaining it. I bet you are getting taxed a lot from the look of the hotel that you call home.
Reply
I am definitely being reasonable taxed
Reply
Great Graphic! Have you guys heard of the FairTax? HR 25 in the House of Representatives. It eliminates the personal income tax, the corporate income tax, all social security and Medicare/Medicade withholding, and other taxes and eliminates the IRS as we know it. The Feds are then funded by a national sales tax on all new goods and services. Business purchases to be incorporated in their finished products are not taxed! Talk about a boost to entrepreneurs! Check it out at FairTax.org.
Reply
The income tax was never ratiffied. The offshore banks take the money. This is straight fact. In 1984 ron regan found that nothing you pay in income tax goes to roads, schools ect.
Income tax is a scam.
That said this last year i dont have to pay income tax. Once i get a job and start making more money online its going to be much different.
Reply
Is it true that every household in america has to fill out a tax return?
Seems a complicated way of doing it if this is tre. Why don’t the employers just handle all the tax like in other countries?
Reply
Just buy physical gold coins or bars. Last time I checked people only get taxed on paper money that they hold or acquire.
With the way the economy is now, its probably a good idea to have only enough paper money in your possession to get from one month to next. The rest should go to physical gold- that should go in a plastic/glass container-that should go in a hole in the ground- that only you and one trusted person know about.
Reply
Years ago my auto mechanic/partner couldn’t come up with $26.oo to pay his tax dept; an IRS agent showed up at the garage we worked at to collect the dept from him personally. What I’d like to know is; how does a US Senator make a mistake of one quarter of a million dollars, and get away with it so long?
Reply
Oh no! tax time again
Reply
I agree with you Neil, here in our country tax system is not only complicated but also charges large percentage on most of the items.
Reply