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April 28, 2005
Tax Reform Update
Here's an informative update on the state of the Bush administration's efforts to reform the tax code. Author Liz Ann Sonders is Chief Investment Strategist for Charles Schwab & Co., and sits on the bipartisan Advisory Panel on Federal Tax Reform (via Free Republic). Some good bits (emphasis mine):
Since Feb.16, we have held seven public meetings across the country. [...] We repeatedly heard that our system is needlessly complex. [...]
Increasingly, Americans are looking to experts for help navigating this complexity, with over 60% using a paid preparer to compute their taxes. [...] The complexity of the tax code is costing the U.S. economy about $140 billion per year, according to commission estimates that take into account the size of the IRS budget, out-of-pocket tax preparation costs, and the six billion hours individuals and businesses spend annually preparing their taxes. That’s roughly the same as giving $1,000 to every family in America, or the amount of money needed to fund all of the following: the Department of Homeland Security, the State Department, NASA, the Department of Housing and Urban Development, the Environmental Protection Agency, the Department of Transportation, the United States Congress, our federal courts and all foreign aid.
This is staggering, and very depressing. It is a monument to the power of the bureaucracy and of special interests armed with smart lobbyists. Sonders goes on:
Two of our more distinguished witnesses, James Baker and Alan Greenspan, told us that a broad-based, low-rate tax system would provide the greatest economic efficiency, simplicity and ease of administration. It was observed that the wave of tax reform in developed countries around the world during the past two decades reflects the view that low-rate, broad-based, progressive systems are fairer and more efficient than tax codes laden with special provisions that must be subsidized by higher rates on all taxpayers. [emphasis in original]
As Ms. Sonders points out, the need for and benefits of tax reform are points that everyone agrees with. Of course the gordian knot arises from...who, exactly? Who can possibly defend the utterly wasteful and unfair system we now labor under? This is one of those issues you'd think a liberal could support...the potential for freed-up (if not increased) revenue ought to be a spur even to the Democrats.
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