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Tuesday, April 9, 2013

Tax Committee Chairs Say Reform is On the Way

The chairs of the House Ways & Means and Senate Finance Committees - Congressman Camp and Senator Baucus, respectively, had an op ed in the April 7, 2013 Wall Street Journal titled - "Tax Reform Is Very Much Alive and Doable." They acknowledge that there are partisan differences that can cause problems, but still think it can be done in an open, transparent way with opportunity for the public to weigh in.

They also state they have agreed on "three fundamental principles to ensure that tax reform grows and expands the economy." These are:
  1. Boost for America's families - they describe this as accomplished by simplification so "regular families" are not disadvantaged compared to "those who can afford high-price tax advisers." They want to keep the current progressive system and "close special-interest loopholes to help lower rates."
  2. Level the playing field for US employers - improve international competitiveness.
  3.  Parity for small businesses relative to larger businesses.
That all sounds good.  We'll have to see more details to know what it all means.  While Congressman Camp has provided some significant amount of details on international reform and changing how passthroughs might be taxed, we still need to see what the "loopholes" are that will be cut and how low the individual and corporate tax rates can go in a revenue neutral manner.

I also think it is doable. I think greater public awareness is needed on the over 200 special tax rules in the income tax and their effect relative to lower rates for all taxpayers. To better meet principles of good tax policy, we will need to have a simpler system with few special rules.  We'll see how doable that is.

What do you think?

1 comment:

Unknown said...

I believe that tax reform is definitely doable and necessary for our economy to thrive and sustain itself. It’s comforting to know that Congress is taking serious action to make tax reform a reality and allowing the general public to not only provide their input but to also participate directly with changes to our tax system.
Although Max Baucus and Dave Camp did not provide detail in their article “Tax Reform is Very Much Alive and Doable” on what specific tax items Congress will focus on, they did discuss what results they hope to achieve which is a start. I agree that simplifying the tax code to allow taxpayers to spend less dollars and time in order to comply with the tax law should be one of the main focuses for tax reform.
Political campaigns have always been centered on beneficial tax changes for the general public and to address budget concerns. I find Baucus and Camp’s comment regarding tax reform being used as a political weapon interesting and unavoidable as there are always differences in opinion to whether a tax change should be enacted. I agree that tax reform should not be about politics but it will be difficult to keep politics out of discussions and the decision making process. It was reassuring, however, to read that Baucus and Camp believe that tax reform is necessary and should be driven by the need to serve the public, enhance the economy, and restore trust in the government.
There are many needed changes to our tax system but it doesn’t have to happen all at once. With the right goals in place, transparency for specific results expected to be accomplished, and the support of the general public tax reform is definitely doable.