The President's Economic Recovery Advisory Broad, aka PERAB in D.C.-speak, today released its long-awaited report on tax reform options.
Chairman Paul Volcker (pictured at right) and his panel colleagues note that they weren't asked to "evaluate competing proposals for overarching tax reform." So don't dive into the document expecting a 2010 version of the historic 1986 tax reform act.
The one directive the Board did have was that it not consider tax options that would raise taxes for families with incomes less than $250,000 a year. But PERAB didn't take that to mean that "every option we considered must avoid a tax increase on such families."
Rather, the tax options "taken together should be revenue neutral for each income class with annual incomes less than $250,000," says the report intro.That means that specific changes can either raise or lower taxes for lots of folks. Or as the report acknowledges, the various tax options might result in "winners" and "losers."
I am soooo glad this came out in time to provide fodder for the midterm elections. Now exactly how do I indicate sarcasm in text?
But where suggestions raise taxes for some and lower them for others, adjustments to the standard deduction, tax rates or other provisions could offset those inequities, says the panel.
"Of course, even if the rates are adjusted to be revenue neutral in each income class, there will be individual taxpayers who gain and lose," acknowledges PERAB.
In view of that, the Board hopes "the Administration and the Congress will select changes that are desirable on their merits and not worry about the distributional effects of each of them individually."
Good luck with that. No sarcasm intended this time.
What's in it? I haven't given the report an even cursory read yet. But I did want to let you know the broad brush strokes of the tax reform picture it paints.
The section dealing with tax simplification is divided into six option categories, identified as A through F.
Group A examines ways to make taxes for families easier. Covered here are child-related credits, education tax breaks and the kiddie tax. PERAB also looks at filing status considerations (remember the uniform definition of a child attempt?), Earned Income Tax Credit (EITC) issues and tax issues faced by divorced parents.Group B deals with how taxes impact savings and retirement decisions. Among the areas investigated are possible ways to consolidate various retirement accounts, improve saving incentives and simplify retirement disbursements and the taxation of Social Security benefits.
Group C looks at simplifying capital gains taxation.
Group D is how to simplify the tax filing process.
Small business tax concerns, including accounting methods and home-based workers, are in the Group E recommendations.
Finally, in Group F the panel tackled everyone's favorite revenue raiser, the alternative minimum tax, or AMT. The panel examined whether to eliminate it (yes!) or modify and simplify it (not yes).
The 126-page report also looks at compliance options, as well as corporate and international taxation issues.
So y'all now know how I'll be spending my weekend.
I'm hoping you have better things to do on Saturday and Sunday. But just in case, I wanted to let you know that The Report on Tax Reform Options: Simplification, Compliance and Corporate Taxation is finally available for you to thumb through.
I'll be blogging about some of the report's specific tax reform suggestions in the coming days and weeks.
- White House tax reform panel report to be issued on Aug. 27
- Tax cuts or total tax reform?
- 'Uncle' Alan Greenspan's latest on taxes
- Debunking 5 Bush tax cut myths
- Is it time for tax reform?
- 2010's expiring tax cuts likely to be dealt with
by a lameduck Congress
- The ever-growing tax code
- White House seeks tax advice
- Presidential tax panel, take 2
- Tax reform panel report delayed
- Tax overhaul, over and out ... for now
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