Tax Reform: A Reference Handbook

Tax Reform: A Reference Handbook

Tax Reform: A Reference Handbook

Tax Reform: A Reference Handbook

Synopsis

Dissatisfaction with high taxes is literally an American tradition; indeed, the American Revolution that led to the founding of the United States started as a tax revolt. Today, widespread displeasure with our tax system continues, as demonstrated by the strong anti-tax position of the recent Tea Party movement.

Tax Reform: A Reference Handbook, Second Edition introduces lay readers to taxes in general, the U.S. tax system in particular, and the issues involved in reforming the system. Details regarding past tax reform measures are provided to lend relevance and perspective to recent tax reform proposals, such as replacing the income tax (and the IRS) with a federal sales tax. The author stresses political rather than technical issues, and presents all viewpoints on this hotly debated topic fairly.

Excerpt

In the first edition of this book your author predicted that “tax reform will continue to be a major policy debate in the first decade of the twenty-first century.” A dozen years later this prediction has proved true. Although nearly everyone agrees that the U.S. tax system is in need of reform, the agreement ends there. One of the great debates of the next decade will be not only the design of the U.S. tax system but also the appropriate size of the government and the amount of wealth that the government will take from citizens in the form of taxes. Accordingly, the tax reform debate is also a debate about the role of government and individualism in American life. When the government funds programs like national defense, Social Security, subsidized school lunches, and federally subsidized student loans, the money come from citizens’ taxes. Tax reductions will reduce these government programs as well as others, so many people have a personal stake in this debate.

The American Revolution started as a tax revolt. In the memorable Boston Tea Party, colonists angry about the rise in tea taxes imposed unilaterally by England dumped imported tea from ships into the Boston Harbor. This event popularized the cry of “No taxation without representation” and helped galvanize revolutionary fervor in the colonies. Displeasure with high taxes remains a contemporary issue. However, complaints about the tax amounts themselves are less frequent than complaints about the complexity and difficulty of complying with the tax rules. Congressional hearings castigating the Internal Revenue Service (IRS) for harassing taxpayers illustrate the widespread displeasure among Americans with the current U.S. tax system. This prevalent dissatisfaction suggests that one of the plans being considered to simplify or modify the present system may be adopted.

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