Limits to Loopholes

Businesses are passing up tax deductions and credits, not because of ignorance but because of complexity:

Executives, particularly at small and medium-size companies, complain that many of the tax deductions are either too cumbersome or too confusing. In some cases, the cost of obtaining the tax benefit is greater than the benefit itself....The result: many companies are saying "no, thanks" and are likely paying more taxes than legally required. And corporate breaks that Washington hopes will boost the economy often prove ineffective.

In our middle-class household we are eligible for several tax breaks that we decline to claim because of the complexity of record-keeping and the incremental expense to our business tax software (not Turbotax). Last year we didn't bother filing the forms for the Domestic Production Activities Deduction or the Foreign Tax Credit, whose complexity is daunting even to professionals. (We did take the FTC as a deduction--less beneficial than a credit--but much easier to claim.)

Jobs, health care, and war and peace will be the main concerns of the electorate this November. As for this voter and long-suffering tax filer,

If any of the political candidates had a credible program to simplify the tax code, I would support that candidate in a heartbeat even if it meant that my bill would be, say, 10% higher, and in our case we’re talking about an increase of thousands of dollars.