7th Anniversary of 21st Century Taxation Blog

Today - May 14, 2014 marks the 7th anniversary of this 21st Century Taxation Blog. I started this blog when I was a fellow with the New America Foundation.  I was charged with getting new ideas out into the mainstream, such as through op eds.  Given the times, I thought a blog might also be a helpful approach.  I think it has.  I aim to post at least weekly and now I also blog at SalesTaxSupport.com and Biowebspin and my blog entries are picked up by Proformative and Tax Connections.  I've met people I likely would not have met if I had not been blogging.  And, it's fun.

My initial aim hasn't changed.  I aim to critique proposals and existing rules as to whether they meet principles of good tax policy and help move our tax systems into the 21st century ways of living and doing business.  I also suggest some ideas of my own. And I've got a variety of websites related to tax reform at http://www.21stcenturytaxation.com/.

Here are two reforms I'll offer today:

1. As part of federal income tax reform, repeal Section 263A - the unicap rules.  These rules were not really needed when enacted as part of the Tax Reform Act of 1986.  Their main purpose was likely as a revenue raiser to help lower rates. These rules apply to large retailers (over $10 million of receipts) and producers of tangible property (whether for self-use of sale). We have other rules governing capitalization of benefits that provide long-term benefits (Section 263(a)). We have longstanding rules on what a producer of inventory needs to capitalize (similar to what is required for books). Also, today, companies likely employ more just-in-time inventory practices than in 1986.  Unicap requires calculations and recordkeeping beyond what is required for financial statements. It is only a timing difference. Let's really simplify the federal income tax law and repeal it.  [See 2008 post and link to a "trends" and tax reform table at the end.]

2. As part of eliminating the continued deficits in the Highway Trust Fund, let's explore a gas tax that is not based on how many gallons of gas you purchase. Instead, let's find a way to tie it to how many miles you drive.  With people driving more fuel efficient cars, including ones that don't even require purchase of gasoline, the current system is outdated. Oregon experimented with a vehicle miles traveled approach and there are studies out on alternatives. [See 2010 post and 2014 post.]

What do you suggest to move our tax system into the 21st century?

Thanks for reading this blog!