“In his remarks to the Harvey Kennedy School in Cambridge,
Massachusetts, the United States Inland Revenue Service (IRS) Commissioner
Douglas H. Shulman said that one of the
greatest impediments to effective tax policy implementation is complexity,
and that, above all, most taxpayers want tax code simplicity.”
Here is some of what Commissioner
Shulman said –
“Making the tax code less complex is the single most important thing
that could be done to improve taxpayer service and boost compliance.”
“Each tax benefit has its own series of requirements, some of which
overlap, but many of which do not. Many of the tax benefits are income limited
or phased out at different income levels. Certain tax benefits must be
coordinated with each other. Then start to layer on other complexities,
including standard vs. itemized deductions, medical expenses, education
expenses, charitable expenses, local taxes, and for many taxpayers, the
Alternative Minimum Tax... the list goes on and on.”
“Complexity can lead people to not take advantage of tax benefits,
largely credits and deductions, that Congress intended them to have, either
because they don’t understand them or are afraid they may be ineligible. And in
my experience, when laws or regulations are complex, it creates opportunities
for those who want to game the system.”
Congress should “try to resist the temptation to enact
short-term provisions that may expire but are then extended. This has an
enormous unsettling effect on both clarity and stability. Last year, the JCT
identified more than 130 tax provisions that were set to expire at the end of
2010, with another 65 due to sunset at the end of 2011.”
“Complexity grows incrementally with every legislative session. The
15,000 plus changes to the tax code since 1986 are anything but elegant,
anything but simple, and anything but clear to the average taxpayer. A simpler
system could better further policy goals by having a more involved and engaged
taxpayer base that would take advantage of incentives to which they are
entitled and thereby improve their economic position.”
The article also points out –
“While the Joint Committee on Taxation (JCT) found that between 1980 and
2010, the number of tax expenditures in the code grew from slightly less than
100 to almost 250, and that the IRS has counted that there have been 3,000
legislative changes to the tax code since 2000, he provided some ideas on how
to deal with some of the difficult problems that the IRS faces in interacting
with taxpayers.”
I hope the idiots in Congress
were listening.
TTFN
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