Congress Considers Tax Simplification | AccountingWEB

Congress Considers Tax Simplification

Congress's Joint Committee on Taxation has presented the legislative bodies with a report, produced over the past 18 months, highlighting 150 recommendations for simplification of the Tax Code.

Among the recommendations noted were:

  • Repeal of the alternative minimum tax
  • standardization of the definition of "dependent child" for various benefits
  • elimination of the phase-outs of personal exemptions and itemized deductions
  • streamlining the taxation of Social Security benefits
  • eliminating income ceilings for deductible and Roth IRAs
  • returning to the old system of excluding from tax a portion of a taxpayer's capital gains

The Treasury Department estimates that, as a result of these areas as well as other complications, United States taxpayers pay as much as $150 billion each year to hire professional tax assistance.

Several members of the Senate Finance Committee who are examining the report seem to favor simplification. "It's time to stop talking about it and do something about it," said Senator Max Baucus, D-MT.

Others are not ready for change. Senator Jeff Bingaman, D-NM, has voiced concerns about the loss of tax dollars that would accompany simplification. Joint Tax staff director Lindy Paull told the Finance Committee that the repeal of the alternative minimum tax alone would cost the government about $215 billion over 10 years.

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