Mail Magazine 24
IRS Watchdog Says Tax Code Too Complex, Recommends Romney’s Tax Plan
by Duane Lester 

In her annual report to Congress, National Taxpayer Advocate Nina E. Olson told them what most Americans already know: the tax code is too complex. 

It’s so complex, she said, it actually hurts revenue: 

The report said Congress should approach tax reform in a manner similar to zero-based budgeting — encouraging Congress to examine the entire tax code with the idea of scrapping all tax breaks except those with the greatest public benefit. 

That’s the rub, isn’t it? After all, who decides what break has the “greatest public benefit?” 

I would think the people who donated to the winner’s campaign would find their tax breaks to be more beneficial than the guy who donated to the other guy’s campaign. 

Congress’s nonpartisan Joint Committee on Taxation, which assists both parties with legislation, has estimated that tax subsidies will total about $1.1 trillion for fiscal year 2013, compared with about $1.4 trillion in revenue from individual income tax during the same period. 

To put that in perspective, Congress could lower individual rates across the board by 44 percent and come up with the same amount of revenue if it eliminated all tax breaks, according to the taxpayer advocate’s report. 

That sounds familar…where have I heard that before? 

With the presidential campaign reaching a soggy finish, we’re taking a final pre-election look at the tax policies of Barack Obama and Mitt Romney. In another post, we described the president’s proposals. Here is a rundown of his GOP challenger’s tax agenda. 

The elevator speech: Romney favors multiple tax cuts for individuals and would reduce corporate income tax rates. By themselves, his specified tax cuts would reduce federal revenues by trillions of dollars over the next decade. However, Romney says he would avoid adding to the deficit through faster economic growth and unspecified reductions in current tax preferences. Romney would not use new taxes to help lower the deficit. 

Yeah, they pretty much suggested we do what Mitt Romney said he’d do if elected. 

If Congress were to lower individual rates across the board by 44 percent and eliminate all the tax breaks, it’s possible they would raise more than the same amount, and actually stimulate the economy at the same time. 

Especially if they lowered the rate taken from businesses. 

That’s because more people would have greater disposable income since it isn’t being looted by the government and could spend it in businesses who also have more disposable income. More money and more business would result in people being hired to expand the business. That results in a wider base to draw taxes from and, even though the government takes a smaller bite, because it’s from a greater number of people, the overall bite is bigger. 

Which brings us to this quote from William G. Gale, a tax-policy expert with the Brookings Institution: 

Recent history shows that Republicans are likely to oppose any plan to generate new revenue, and Democrats would probably contest the lower rates, Gale added. 

Patently untrue. 

Rand Paul made the case for the exact tax reform Olson recommends, and said it could result in higher revenue: 

I’m for a simple tax code. My five-year balanced budget has one rate: 17% for corporate, 17% for private, and it has almost no deductions. You fill it out on one page and then there wouldn’t be special deductions; no individuals paying no taxes and no companies paying no taxes. But there would be no companies paying 35% income tax, which is twice what the rest of the world is paying. We are losing companies overseas because we are the highest tax rate in the world. That has to come down. 

Burnett, seemingly unsatisfied with his initial answer, pressed him on the more “intellectual” point, asking him if he is “all right with some people, all in all, may end up paying more than they are paying now. You get a simpler tax code and a simpler rate, but they could pay more.” 

“Absolutely,” Sen. Paul responded. “Absolutely.” 

I agree. 

Source: LibertyNews 

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