Tax Reform: How Do We Catch Up with the Maldivians?
- Bipartisan compromise?
- Congressional leadership changes?
- Current events?
- Good tax policy?
In my last blog, I predicted that fundamental tax reform would not come before 2014 so we have some time before the test answer arrives. But I do want to talk about good tax policy in this blog.
The AICPA does not take a position on tax rates or specific approaches, e.g. a territorial versus a worldwide tax system. Instead, we have focused on providing unbiased facts and analysis to foster informed discussion, urge conformity with our Principles of Good Tax Policy and keep a vigilant eye on the end goal: Emerging with a system that is perceived as balanced, fair to all, administrable, economically efficient, transparent, and neutral in its effect on economic activity.
Where do we take a position? Areas of the tax code that are causing taxpayers a lot of grief (I know, which one isn’t?) A few examples of recommendations we have made to Congress that would make compliance easier are:
- Harmonizing and simplifying the various education incentives.
- Establishing a logical set of tax return due dates focused on promoting a chronologically correct flow of information between pass-through entities and their owners.
- Reforming civil tax penalties to deter bad conduct in a manner that encourages voluntary compliance.
- Providing a simplified and realistic way to deal with the proliferation of corrected Form 1099s.
The AICPA has testified on tax reform before the House Ways and Means Committee and the Senate Finance Committee and met with the staffs of those two key committees numerous times. We have submitted technical recommendations to congressional study groups (Education & Family Benefits, Pensions/Retirement, Small Business/Passthroughs, Income and Tax Distribution and Charitable/Exempt Organizations), whose findings will shape legislation expected later this year. Our Compendium of Legislative Proposals submitted to Congress earlier this year, includes over 20 proposals that promote simplicity and fairness in the tax code.
Oliver Wendell Holmes once said: “I like to pay taxes. It is purchasing civilization.” I’m just hoping that after all this effort, we can make paying taxes a little more civilized!
Edward S. Karl, CPA, Vice President of Taxation, American Institute of CPAs.