"And we should not overlook the fact that these compliance costs are declining because of the computerization of accounting and bookkeeping."
Do you have a source for that assertion? Every analysis that I have seen of compliance costs shows them increasing constantly. The reason, of course, is that the growth in our tax system overwhelms the improvements in technology that you cite. In fact, if you look at a graph of the number of pages in the system and study it carefully, you will learn that the rate of growth is not only unsustainable, it is actually accelerating.
"Personally I don't accept the estimates of the actual cost of compliance in any event and believe them to be overstated."
There are a number of estimates of compliance costs out there, with fairly wide ranges. All are huge. Since you don't accept any of them, do I take it that you believe that the compliance costs of the current system are $0?
My assertion is backed only by the evidence that the ability to handle huge volumes of data has been increasing at a far faster rate than the tax codes. Computr capacity is doubling every year or so. Tracking almost any transaction is easy.
Compliance costs are substantial but should also be falling for the same reason. And a lot of them consist of costs such as a "cost" of having a wife which no one can really afford. In other words, for the vast majority of individuals, it is a cost derived from attributing a monetary equivalent to time which would not be being reimbursed. Kinda like the "cost" of sleep.
Ironically it is precisely to reduce those costs that the withholding system was created.