Tax simplification is focus of yet another Capitol Hill hearing
Monday, March 09, 2015
While millions of us are still struggling with our annual tax filing, members of Congress are toying with the idea of making this annual task easier.
Tuesday, March 10, the Senate Finance Committee will hold yet another hearing on the tax code. Committee Chairman Orrin Hatch (R-Utah) already has released his thoughts about tax reform. Tomorrow, he wants to hear about the merits of tax simplification.
I'm willing to bet that those of us still working on our 1040s have lots of good things to say about a simplified Internal Revenue Code.
We'll find out tomorrow what four expert witnesses think. They include Bruce Bartlett, who served as a former domestic policy adviser to Ronald Reagan, who signed the last major tax code overhaul in 1986, and as deputy assistant secretary for economic policy under George H.W. Bush, who had his own political problematic no-new-taxes promise.
A new GOP tax reform plan: Meanwhile a potential Republican presidential candidate has just floated his tax reform suggestions.
Sen. Marco Rubio (R-Fla.), the Sunshine State's once highly touted new face of the GOP, has partnered with Sen. Mike Lee (R-Utah), on a tax plan that would condense the current seven income tax brackets to just two.
The rate would be 15 percent for folks earning up to $75,000 ($150,000 for married joint filers) and there would be a top tax of 35 percent applied to earnings above those levels.
Taxes on capital gains and dividends would be eliminated, under the Rubio-Lee plan, as would most deductions, except for a capped mortgage interest write-off and charitable giving. The pair also wants to repeal the Alternative Minimum Tax.
On the corporate side under Rubio and Lee, the top business tax rate would be 25 percent, down from the current 35 percent level.
The Rubio-Lee plan certainly would be simpler for many filers. And we'll hear much more about the plan if, as expected, Rubio soon formally launches his 2016 presidential.
Potential change in the corporate tax code: Tax reform also was the main topic last week at my other tax blog, with business changes apparently in the lead.
As I noted over at Bankrate, the pool of business taxpayers is a smaller, albeit very valuable, segment, making changes to that part of the code a bit easier from the administrative standpoint.
There's also more bipartisan consensus for corporate tax reform. And big businesses are big political donors, so their tax wants and needs get a lot of attention on Capitol Hill.
Then there's the matter of money. It seems that a lot of big businesses are paying zero taxes under the current system.
Business taxes also caught the eye of one of the more liberal members of Congress, Sen. Bernie Sanders (I-Vt.), who sent a letter to President Obama urging the commander in chief to use executive orders to close some major corporate tax loopholes.
Watch for these and other tax reform ideas to be tossed about in the halls of Congress, as well as on the campaign trail.
My additional thoughts at Bankrate Taxes Blog generally are posted every Tuesday and Thursday. If you don't get a chance to check them out then and there, check in here over the weekend where you'll usually find highlights and links.
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