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January 31, 2005

Tax Transaction Costs; Lederman Sources

Professor Lederman did a useful follow-up of the topic of our law-and-econ lunch last week, which was the transaction cost of taxation. Here are some facts:

The IRS budget is around $10 billion, http://www.irs.gov/pub/irs-utl/budget-brief-05.pdf.

IRS collected nearly $2 trillion in revenue in 2003: http://www.irs.gov/irs/article/0,,id=98141,00.html.

IRS reports that it costs taxpayers 48 cents per $100 collected: http://www.irs.gov/irs/article/0,,id=98141,00.html. The site doesn't say, on the front page, what this means. I think it means the IRS's budget cost, 10 billion divided by 2000 billion dollars. Taxpayer costs and allocative distortion would be much higher.

IRS Data Books for 2001-2003, which contain a variety of interesting statistics, are available at http://www.irs.gov/taxstats/article/0,,id=102174,00.html.

Posted by erasmuse at January 31, 2005 02:52 PM

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