The Political Dynamics. Presidents love to complain about the complexity of the Tax Code, but most seem to add to its complexity once in office. President Obama in his 2013 State of the Union speech said “The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring—a tax code that ensures billionaires with high-powered accountants can't work the system and pay a lower rate than their hardworking secretaries; a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America.” As noted by Bob Keebler and Peter Melcher in "The New 3.8% Surtax and Trusts & Estates," LISI Income Tax Planning Newsletter #40 (March 21, 2013) the ObamaCare tax is adding new tax uncertainties and complexities to tax planning for estates and trusts - to say nothing of the complexity and cost added to businesses. If adopted, the President's 2014 budget proposals would create even greater complexity to the federal tax system.
Just don't hold your breath waiting for simplicity. Other national leaders have been saying similar things for years:
“It is time for a complete overhaul of our income tax system… it is a disgrace to the human race.” Jimmy Carter, accepting the Democratic Nomination in 1976.
“[The federal government] should have a tax system which looks like someone designed it on purpose” William E. Simon, former Treasury Secretary during the Nixon administration (1981).
"And I'm the one who will not raise taxes. My opponent now says he'll raise them as a last resort, or a third resort. But when a politician talks like that, you know that's one resort he'll be checking into. My opponent won't rule out raising taxes. But I will. And the Congress will push me to raise taxes and I'll say no. And they'll push, and I'll say no, and they'll push again, and I'll say, to them, ‘Read my lips: no new taxes!'" George H.W. Bush, accepting the Republican Nomination in 1988.
The first annual report by the Taxpayer Advocate in 1997 (as required by the Taxpayer Bill of Rights II) listed the complexity of the federal tax law as “The single most burdensome aspect of compliance for most taxpayers.” The Tax Code has only become more complex since 1997. A variation of the 1997 complexity statement has been made in each Taxpayer Advocate report since 1997.
In April 2001 Congress's Joint Committee on Taxation issued a 1,292 page, 5 pound report on how to simplify the Federal Tax Code. In November 2005, the President’s Advisory Panel on Federal Tax Reform reported on how the Tax Code could be simplified. The only real use of both reports seems to be as great bookends in many Congressional offices.
“Another drag on our economy is the current tax code, which is a complicated mess, filled with special interest loopholes, saddling our people with more than 6 billion hours of paperwork and headache every year.” George W. Bush, accepting the Republican Nomination in 2004.
“Complexity now causes $1 in Compliance Costs for each $7 in Federal Revenue Raised.” Ways and Means Chairman (Republican) William Thomas (2005).
"The widely recognized complexity of the tax results in (1) significant compliance costs, frustration, and anxiety for taxpayers; (2) decreased voluntary compliance; (3) increased difficulties for the Internal Revenue Service (IRS) in administering the tax laws; and (4) reduced confidence in the fairness of the tax. The tax also causes taxpayers to change their work, savings, investment, and consumption behavior in ways that reduce economic efficiency and, thereby, taxpayers’ well-being." Statement to Congress by David M. Walker, Comptroller General of the United States (August 3, 2006).
The [tax] code today encompasses 9,500 pages of very small print. While every word…has some justification, in its entirety it is an abomination” Paul O’Neal, former Treasury Secretary during the George W. Bush administration (2008).
The December 2010 Simpson Bowles Report of the National Commission on Fiscal Responsibility and Reform said: "The tax code is rife with inefficiencies, loopholes, incentives, tax earmarks, and baffling complexity. We need to lower tax rates, broaden the base, simplify the tax code, and bring down the deficit." Both political parties pretty much ignored the report.
“... making the tax code less complex is the single most important thing that could be done to improve taxpayer service and boost compliance.” IRS Commissioner Douglas H. Shulman's testimony to Congress (2011).