2023 tax season: Why the U.S. tax system is so complicated

Yahoo Finance’s Rebecca Chen joins the Live show to discuss the U.S. tax system and why it can be difficult to file taxes.

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- Tax day-- we've been counting down. If you're keeping track, it's now less than a week away. If you're sweating your 1040s and you're 1099s, remember this. In Estonia, it takes less than five minutes to file your taxes. And it's free. Oh, that makes me feel a lot better. Thank you very much. Here's Yahoo Finance's Rebecca Chen on why the US taxes-- tax system is so complicated as part of our ultimate tax guide. Why is it so complicated, Rebecca?

REBECCA CHEN: So let's start off with some statistics. In America, the average taxpayer takes about 13 hours to do their tax return, and they pay about $240 for tax prep fees. And if they have a question for the IRS, it takes them about 22 minutes to wait online. And that's if they get through. In 2021-2022, I think only-- studies show that only 10% of callers got through to the IRS.

- Oh, my gosh.

REBECCA CHEN: So and that kind of brings us to why our tax system is so complicated and why is it sort of not very friendly to taxpayers. And it's really because our tax system is trying to do more than just collect taxes. It's trying to-- it has a progressive system. And they're trying to distribute social welfare. They're trying to encourage certain social agendas.

For example, Congress wants us to save for the retirement. So you have the tax-- you have the deduction for IRA contribution. And they want us to become homeowners. So you have the mortgage interest rate deduction. So the reason why it's so complicated is really because the system is more than just collecting taxes. It's a system that's used for a political agenda-- not political agenda, but Congress' agenda for what they believe the society should look like.

- Interesting.

- OK.

- I've been looking at flights to Estonia as well since you mentioned it at the top. It's only $300.

- Rebecca, thanks so much. Appreciate it. We've got to leave it there.