April 8, 2014

SIMPLIFY, SIMPLIFY:

Tax Revolt Brews in House (IRA STOLL, April 8, 2014, NY Sun)

House Republicans are quietly moving ahead with dueling plans to replace the tax code with a simpler system. It's a hot topic in advance of the April 15 filing deadline for individual income tax returns.

The latest budget blueprint from the chairman of the House Budget Committee, Paul Ryan, reports that Americans spend an estimated 6 billion hours and more than $160 billion on tax compliance. That dollar figure is not the tax payments, it's just the tax-related compliance spending on things like software, accountants, and lawyers. A lot of Americans are thinking there has got to be a better way. [...]

Lower-profile, but potentially more significant long-term, are the plans offered by two other Republican lawmakers. Mr. Ryan's budget blueprint mentions them alongside the Camp proposal as "good ideas" and "growth-oriented tax plans."

One is House Resolution 25, the Fair Tax Act, offered by Congressman Rob Woodall of Georgia. It would repeal all federal corporate and individual income taxes, including payroll taxes, capital gains taxes, and the death tax. It would replace them, and fund the government's operations, with a new federal consumption tax on goods and services at a 23% rate.

The other is House Resolution 1040, the Flat Tax Act, introduced by Congressman Michael Burgess of Texas. It would give Americans the option of choosing to file with an optional one-page tax return, at a rate of 19% for the first two years and 17% bfor the years after that.

Both the Fair Tax and the Flat Tax are dramatic enough departures from our existing tax code that some skepticism about their prospects is in order. But the encouragement from Mr. Ryan means something; he may take over the tax-writing Ways and Means Committee in the next Congress. Each proposal has backing from other heavyweights among House Republicans.
Posted by at April 8, 2014 7:42 PM
  
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