Accounting News

Thursday, August 16, 2012
Tax Reform Map For Republicans

House Republicans would like to look at tax reform if they maintain a majority in Congress. The goal is to create a simpler flatter tax code. They see the first step as setting up a simpler system for making reforms. They have introduced the idea in a bill titled the Pathway to Job Creation through a Simpler, Fairer Tax Code Act. The bill has been introduced by House Rules Committee Chairman David Dreier and House Ways and Means Committee Chairman Dave Camp. If passed the bill allows tax changes to be sped up. It also removes technical challenges that have delayed or killed many tax reform attempts.

If passed the Republicans would like to move on to their priorities of shrinking the number of tax brackets and the removal of the alternative means tax (AMT). They think they can have this done by the end of next summer according to their timeline.

Whatever your political persuasion it is hard to find someone who doesn't think there need to be tax reform. The exception might be us in the tax preparation community who always benefit from the complexity. The real question is what change is needed. Most economists agree that many of the deductions and credits that are in the tax code make very little sense. But it is political folly to suggest the removal of any of them.

It is my desire that this election season we can have honest debate on how we can move to manage the national debt. If the solution was easy it would already be solved. Both parties will need to rise up and work for a solution. In the end they are likely just going to kick the can down the road for another year waiting for the numbers to miraculously change.

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