Now here's an idea: Simplify the income tax
While we dwell on too many little issues, the big issues go languishing. One real way that American taxpayers can save money is to create more efficient institutions.
Inefficiency in the guise of high administrative costs is one of the two big bugaboos in healthcare — the other being the astronomical amount of resources put into end-of-life medical care. (No, folks, the costs associated with malpractice don't even come close to these two.)
The other way Americans can save gobs of their hard-earned dollars is to simplify the tax structure. Recently in Newsweek, George Will, long the archconservative, praises a plan put forward by Oregon Sen. Ron Wyden — a Democrat, no less.
I agree with both of them. — LP
Inefficiency in the guise of high administrative costs is one of the two big bugaboos in healthcare — the other being the astronomical amount of resources put into end-of-life medical care. (No, folks, the costs associated with malpractice don't even come close to these two.)
The other way Americans can save gobs of their hard-earned dollars is to simplify the tax structure. Recently in Newsweek, George Will, long the archconservative, praises a plan put forward by Oregon Sen. Ron Wyden — a Democrat, no less.
I agree with both of them. — LP
Sisyphus in the SenateThe rest is here.
By George F. Will, Newsweek
July 16, 2007 issue - Sen. Ron Wyden, the Oregon Democrat, has not received the memo explaining that Congress can accomplish nothing in an election year or the year before one. He calls himself the Senate's designated driver, the one not running for president, so he has time to try legislating. He also is the Senate's Sisyphus, determined to roll the boulder of tax reform up Capitol Hill yet again.
The fact that Wyden's proposal, the Fair Flat Tax Act, seems radical is a measure of how foolishness has become conventional. Today, as when tax reform was accomplished in 1986, the objectives are threefold—although Wyden stresses only two.
One is simplification for its own sake. Americans spend an estimated 6.4 billion hours (more than the 6.3 million industrious people of Indiana work in a year) and more than $265 billion on compliance with a tax code that is six times longer than "War and Peace" (not counting 8 million words—20,000 pages—of regulations). And even with professional help, Americans cannot be confident that they have not broken the law concerning this basic civic duty.
Labels: income tax
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The odds of Sisyphus moving that boulder is greater than Ron Wyden moving his Congressional colleagues on tax simplification.
I was thrilled when Wyden and former Senator Bill Bradley announced in October 2006 a Fair Flat Tax designed to simplify the tax code to benefit middle-income Americans. But he seems to be alone in pushing this concept.
As Will points out, tax fairness and simplification was one of Bush’s campaign issues. In January 2005, Bush appointed the President's Advisory Panel on Federal Tax Reform which included former Minnesota Congressman Bill Frenzel. The panel issued it’s report on November1, 2005. A key feature of the proposal would have been to eliminate the Alternative Minimum Tax.
But like so many of other Presidential Advisory Panels (U. S. Commission on National Security/21st Century issued a report on January 31, 2001 warning with terrorism, the 9/11 Commission Report, the Iraq Study Group, and I could go on and on), Bush fails to act.
During an April 18, 2007 Senate Finance Committee hearing, U.S. Treasury Secretary Henry Paulson stated , “There isn’t a major tax reform proposal being put forward right now, and I don’t see that on the dockets in the near future.” I saw it on CSPAN and Wyden was disgusted … virtually, pleading with Paulson to encourage the administration to do something.
Ever since Reagan’s tax reform, there has been unequal treatment of labor income and income from capital. Bush’s tax reform has further improved the tax benefits of dividend and capital gains income. Essentially, the gap widens between working people and investors. Wyden’s legislation would change that.
The question that should be asked, is why would George Will be pushing Wyden’s proposal ? Could it be that he knows that in 2011, the Bush tax cut expire, and for right now the Democrats have more influence then in past Congresses ? Or, is it the Alternative Minimum Tax ?
I’m betting on the ATM. Did you read the May 2, 2007 piece in The Wall Street Journal by David R. Henderson entitled "Don't Abolish the AMT" ? His argument is that a Flat Tax would be fairer than the AMT. But if you read his reasoning, you see that he believes that the Flat Tax will actually reduce the size of government … not necessarily to make it any fairer.
By the way, please encourage your Senators to support Wyden’s bill :
S.1111 Title: A bill to amend the Internal Revenue Code of 1986 to make the Federal income tax system simpler, fairer, and more fiscally responsible, and for other purposes.
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