With yesterday’s deadline for filing most individual tax returns, many Americans are again wondering how the overly complex and inefficient federal tax code could be improved.
“The place to begin is with a major effort to scale back or eliminate the roughly 200 special provisions that elected officials in both parties have carved into the tax code,” says Robert L. Bixby, executive director of The Concord Coalition. These exclusions, deductions, credits, exemptions and preferential rates cut deeply into federal revenue each year.
In a question-and-answer article in the Orlando Sentinel, Bixby explains that these provisions are called “tax expenditures” because “they often have the same effect as the government writing a check.”
Many bipartisan groups have recommended reducing these provisions to simplify the tax code, improve economic efficiency and treat similar taxpayers equally. In addition, Bixby says, this would increase government revenue that could reduce future deficits.
How would fixing the budget impact average Americans’ tax bills? Bixby notes that the sacrifices needed to put the country on a sustainable path “should be widely shared or they will not be politically feasible.” A key way to hold down future tax increases for everyone, he adds, is to enact fiscal reforms as quickly as possible.
External links:
Debunking 7 Persistent Tax Reform Myths (Center for American Progress)
Who Pays Taxes? (Peterson Foundation)
