Tax Reform

885 Words4 Pages
The most serious problem facing taxpayers and the IRS is the complexity of the Internal Revenue Code because Congress uses the complex tax code to achieve political goals that are unrelated to raising revenue. Currently, tax revenue cannot even pay for government spending. Congress should simplify it. The existing tax code makes compliance difficult, requiring taxpayers to devote excessive time to preparing and filing their returns. It obscures comprehension, leaving many taxpayers unaware how their taxes are computed and what rate of tax they pay; it facilitates tax avoidance by enabling sophisticated taxpayers to reduce their tax liabilities and provides criminals with opportunities to commit tax fraud; and it undermines trust in the system…show more content…
budget battle. It is integral to both the Republican House and the Democratic Senate budgets because in every budget item, there is a conservative vs. liberal confrontation, but tax reform is loaded with more confusing detail, and it adds extra layers of difficulty to the budget debate. Some liberal and conservative inclinations tend to intersect when the conversation focuses on elimination of tax preferences. But, both sides have their favorite exceptions. Democrats love tax expenditures for the less affluent. Republicans love the preferences they suspect will stimulate growth. Additionally, there are wide divergences about how the deficit savings from eliminated tax preferences should be used. Republicans like deficit-neutral solutions which invest all savings in lowering rates for growth. Democrats would like to spend those savings, either for compassionate spending or for Keynesian growth…show more content…
corporate income tax rate is too high. In an increasingly global economy, we are the odd man out. Among all the Organization for Economic Corporation and Development countries, we have the second highest nominal marginal tax rate. Because we tax U.S. corporations on their worldwide income, we make it hard for U.S. multinational enterprises to compete against foreign corporations in foreign markets. We also make it unattractive for foreign corporations to invest in the United States. Some budget observers believe that tax reform could be the key to long term fiscal compromise. Instead, some of these extra dimensions could make it the enemy. The devil is always in the details. Tax reform teems with details. Its politics are sometimes treacherous, even for seasoned politicians. Some recommendations for Members of Congress is take several steps, including: -Lay the groundwork for tax reform by holding meetings with constituents to discuss the complexity of the existing tax code and the trade-offs between tax rates and tax breaks that tax reform will require. -Apply a “zero-based budgeting” approach to comprehensive tax reform that starts out with the assumption that all tax benefits will be eliminated and then adds a benefit back only if Members conclude that, on balance, the public policy benefits of providing that benefit through the tax code outweigh
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