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Merely the bookkeeping costs?? Unfortunately this often quoted stat mostly concerns individual

"Individuals bear a cost of $86.1 billion, businesses bear a cost of $102.5 billion and non-profits bear a cost of $5.4 billion."

Introduction of the Tax foundation report: Cost of Complying with Federal Income Tax

"In 2002 individuals, businesses and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code (henceforth called “compliance costs”), with an estimated compliance cost of over $194 billion. This amounts to imposing a 20.4-cent tax compliance surcharge for every dollar the income tax system collects. By 2007, the compliance cost is estimated, conservatively, at $244.3 billion. However, this estimate does not take into account the recently enacted Economic Growth and Tax Reform Reconciliation Act (EGTRRA) of 2001. Taking EGTRRA into account shows that the compliance cost could soar as high as $350.2 billion by 2007.

In addition, the compliance cost does not impact all taxpayers in the same way—it varies by type of taxpayer, by income level and by state. In 2002, businesses bear the majority of the compliance cost with 52.8 percent of the cost, or $102.5 billion. Individuals and non-profits account for the remaining compliance cost—at 44.4 percent ($86.1 billion) and 2.8 percent ($5.4 billion), respectively. By 2007, the percentages remain virtually the same: businesses at 52.4 percent, individuals at 44.8 percent, and non-profits at 2.9 percent."

and has absolutely no bearing on costs of goods.

If it affects businesses it affects production and price of goods and services.

And the small portion that is attributed to businesses is by far their biggest expense towards tax compliance.

Seeing as the greater portion of the "tax compliance" number is actually business related that is abit off mark; Especially considering that "tax compliance" is but a fraction of the total tax related overhead burden which includes planning and litigation costs as well as just "tax compliance costs"

http://www.taxfoundation.org/compliance2002.html

Overhead Compliance Costs

The complexity generated by the growth and constant change of the tax code creates two general types of economic cost: overhead and opportunity cost. Overhead can be divided into three principal activities: the economically sterile exercises of tax planning, compliance, and litigation, all of which act like tax surcharges on taxpayers.

• The first type of overhead is tax planning, which in this context refers to all the economic decisions that individuals and firms make to maximize their benefits in the tax code.

• The second type of overhead, tax compliance, refers here to the basic actions required to file the federal income tax, including record keeping, education, form preparation and packaging/sending.

• The third type of overhead is tax audits and litigation, referring to the cost of the IRS and the Tax Court, as well as all the legal costs that taxpayers incur while dealing with these two government institutions.

Of these three costs, the second, tax compliance, is the only one estimated in this report. It is for this reason that the data presented here should be viewed as extremely cautious estimates of the federal income tax compliance burden on taxpayers.

Most companies don't spend much time pondering over how to beat the tax code, although I am sure there are exceptions. But most companies just worry about making their business work and don't spend much time tax planning.

No they are just spending time trying to figure out how to survive the tax code by trying to minimize that income tax bite, however they may. The costs on business being as much as $724 for every $100 in income tax paid by small businesses, $27 for every hundred income tax paid for the largest of firms that can take advantage of efficiencies of scale to minimize the effect (tax related overhead costs are more akin to fixed costs, a part of the business cost structure even if not one dollar in income taxes is actually due or remitted to government.)

The Bookkeeping is by far the biggest tax compliance cost for businesses, but it is only a small fraction of the $194-235 billion number.

Ahmm, Bookkeeping is all there is in "tax compliance costs" that number represents.

• The second type of overhead, tax compliance, refers here to the basic actions required to file the federal income tax, including record keeping, education, form preparation and packaging/sending.

Too bad "tax compliance costs" are only a small portion (on average 20% in relation to taxes paid) of the total burden on businesses imposed by the complexity of the income/payroll tax system isn't it?

Economic Burden of Taxation
William A. Niskanen
Presented October 2003
Friedman Conference
Federal Reserve Bank Dallas page 6.
www.dallasfed.org/news/research/2003/03ftc_niskanen.pdf

"Given that the elasticity c implicit in recent U.S. fiscal conditions is about 0.8 and the average tax rate is about 0.3, the marginal cost of government spending and taxes in the United States may be about $2.75 per additional dollar of tax revenue. One wonders whether there are any government programs for which the marginal value is that high. Given the estimate of the long-term elasticity c from the U.S. time-series data, the marginal cost of government spending and taxes may be as high as $4.50 at the current average tax rate. "

Business would not have near the problems with corporate taxation that we do but for that fact.

We are also putting aside, of course, the issues of the effect of burying a large and growing factor of the total federal tax burden behind the veil of business hiding government impositions away from the view of ever larger segments of the electorate.

The Honorable James DeMint (R-SC)
United States House of Representatives
APRIL 5, 2001

"There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government.

Bush touts relief as tax day looms

Another 3.9 million Americans will have their income tax liability completely eliminated, officials said.

That's 3.9 million Americans more added to the spending constituency of 70% of the public clamoring for more from government, believing someone else foots the bill.