The process of paying taxes manages to add insult to injury by making it burdensome to comply as you cough up the money the government steals from you. The time lost keeping up on tax rules, filing paperwork, and calculating our own mugging is stolen from the rewarding areas of life, and the costs are diverted from productive activities. How much do we lose in satisfying government’s demands? A new report answers that question in painful detail, just in time for the October 15 extended filing deadline.
The High Cost of Paying High Taxes
“The federal tax code imposes many costs on the US economy. The most direct costs, of course, are the roughly $5.2 trillion in federal taxes (as of fiscal year 2025) that consume 17.3 percent of US gross domestic product (GDP),” the Tax Foundation’s Alex Muresianu and Guy Cardwell wrote last week. “A less direct cost is the time taken out of our lives to comply with a Byzantine tax code that requires billions of hours to complete IRS paperwork and file tax returns.”
Drawing on data from the White House Office of Information and Regulatory Affairs (OIRA), Muresianu and Cardwell note that “Americans will spend almost 6.9 billion hours complying with IRS tax filing and reporting requirements in 2026. This is equal to 3.32 million full-time workers—more than the population of Chicago and nearly 35 times the workforce the IRS employed in FY 2025—doing nothing but tax return paperwork for a full year.”
That’s an enormous amount of time and energy diverted from Americans’ own priorities—like working, running businesses, and raising families—to satisfy federal paperwork requirements so we can cough up the money the government extorts from us under threats of fines and imprisonment. Few of us want to pay that money to begin with, but we have to surrender part of our lives to calculate the amount owed and satisfy tax rules.
As you might expect, all that tax-consumed time comes attached to a hefty price tag.
