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Can Tax Time Be Less Burdensome?
TPC Perspectives on Tax Reform Series
Monday, April 11, 2005
9:00 - 10:30 am
Urban Institute
2100 M Street N.W., 5th Floor
Washington, DC
Panelists:
Lorrie Brown
Economist, State of Washington Department of Revenue
Nina Olson
National taxpayer advocate, Internal Revenue Service
Eric Toder
Senior fellow, Urban Institute
Former director, Office of Research, Internal Revenue Service
Moderator:
David Wessel
Deputy Washington, D.C., bureau chief, The Wall Street Journal
As April 15 approaches, the President's Advisory Panel on Federal Tax Reform is considering proposals to restructure the U.S. tax system. Announcing the panel's formation, President Bush said the system is "hopelessly complex" and imposes a drag on the economy when taxpayers spend long hours filling out forms.
Proposing tax reforms in the name of simplicity is nothing new. The Treasury Department's 1984 proposals were entitled "Tax Reform for Fairness, Simplicity, and Economic Growth." They led to the Tax Reform Act of 1986, which simplified tax law by removing many special preferences, but also introduced new complexities.
The ink was hardly dry on the 1986 act when Congress once again added new deductions, exclusions, credits, and other special preferences to the tax code. From refundable credits for the working poor to special tax rates on businesses' manufacturing income, the tax code has become the favored instrument for promoting a large variety of social and economic policy goals. And the alternative minimum tax--originally designed to prevent a handful of the very rich from avoiding taxes--will soon force tens of millions of middle-income Americans (especially those with children and in high tax states) to calculate their tax liability two ways.
With various changes under consideration, ranging from replacing the income tax with a consumption tax to reforms within the income tax, this forum will examine the costs of complying with the current tax system and possible ways of reducing those costs:
* How much does it cost Americans to
comply with the federal income tax?
* Which taxpayers face the largest
compliance costs?
* How much do paid preparers and tax
software lessen the tax-filing chore?
* Which provisions of the income tax
are most burdensome?
* Which income tax reforms would do
the most to reduce compliance costs,
while maintaining or promoting fairness?
* What does state experience tell us about
the compliance burdens of a consumption tax?
* Why does simplification often get short
shrift, compared with other tax policy goals?
To RSVP, please e-mail: paffairs@ui.urban.org
or call (202) 261-5709. Seating is limited.
For more on the Perspectives on Tax Reform series, visit http://www.taxpolicycenter.org/newsevents/events_prelude_series.
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