Friday, February 04, 2011

Is another round of tax reform coming?

Tax Notes [$] reports that a bill to implement the Deficit Commission's recommendations for eliminating all tax loopholes, allowing for lower tax rates, could be written by March. Hearings to publicize and promote the concept may begin next week.

I hate the word "loophole" in the tax context, there are overtones of inadvertence it in. As if Congress didn't know full well that the loophole was being added to the tax code, it was instead discovered by a wily tax lawyer. Not true for nearly all loopholes.  I like the new phrase "tax earmarks" even less. "Earmarks" are spending commands inserted into legislation without an opportunity for debate or even a vote. Every "tax earmark" was voted on, even if the members of Congress failed to grasp the significance of the measure.

Still, I favor the underlying concept of a flatter income tax larded with far fewer "incentives" to reward the behavior that Congress approves of. 

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