ABA Tax Section, AICPA Tax Section & Tax Executives Institute Recommendations for Simplification
Ed Zollars
simplifications in the tax law presented by the American Bar
Association Tax Section, the American Institute of Certified
Public Accountants Tax Section and the Tax Executives
Institute.
---begin quoted textl
The American Bar Association Section of Taxation, the
American Institute of Certified Public Accountants Tax
Division, and the Tax Executives Institute believe that
simplification of the tax laws should be a high priority
for Congress. In an effort to assist in the process of
simplifying the tax laws, we respectfully submit the
following simplification recommendations.
/*/
ALTERNATIVE MINIMUM TAX (AMT)
REPEAL THE INDIVIDUAL AMT. IT NO LONGER SERVES THE PURPOSE
FOR WHICH IT WAS ENACTED, PRODUCES ENORMOUS COMPLEXITY, AND
HAS UNINTENDED CONSEQUENCES. Originally enacted in 1969 to
address concerns that persons with significant economic
income were paying little or no Federal taxes because of
investments in tax shelters, the AMT today has little effect
on its original target and increasingly affects an
unintended class of taxpayers -- the middle class -- not
engaged in tax-shelter or deferral strategies. The AMT's
failure to achieve its original purpose is attributable to
the numerous changes to the Internal Revenue Code since 1969
specifically limiting tax-shelter deductions and credits.
Studies indicate that, by 2007, almost 95 percent of the
revenue from AMT preferences and adjustments will be derived
from four items that are "personal" in nature and not the
product of tax planning strategies -- the personal
exemption, the standard deduction, state and local taxes,
and miscellaneous itemized deductions. Further, the
interaction of the AMT with a number of recently enacted
credits intended to benefit families and further education
means that even individuals who ultimately have no AMT
liability will suffer ill consequences since the AMT reduces
the benefits conferred by those credits. The AMT is too
complex and imposes too great a compliance burden.
Significant simplification would be achieved by its repeal.
REPEAL THE CORPORATE MINIMUM TAX AS WELL. The corporate AMT
suffers from the same infirmities as the individual AMT. It
requires corporations to keep at least two sets of books for
tax purposes; imposes myriad other burdens on taxpayers
(especially those with significant depreciable assets); and
has the perverse effect of taxing struggling or cyclical
companies at a time when they can least afford it. If repeal
of the corporate AMT leaves specific concerns unaddressed,
those concerns should be addressed directly by amending the
Code provisions causing the concerns, not by preserving a
system requiring all taxpayers to compute their tax
liability twice.
PHASE-OUTS
ELIMINATE OR RATIONALIZE PHASE-OUTS. Many Code provisions
confer benefits on individual taxpayers in the form of
exclusions, exemptions, deductions, or credits. These
provisions, many of which are complex in and of themselves,
are further complicated because the benefits are
specifically targeted to low and middle income taxpayers.
The targeting is accomplished through the phasing out of
benefits for individuals or families whose incomes exceed
certain levels.
There is no consistency among the phase-outs in the measure
of income, the range of income over which the phase-outs
apply, or the method of applying the phase-outs. Phase-outs
are, in fact, hidden tax increases that create irrational
marginal income tax rates for affected taxpayers, add
significantly to the length of tax returns, increase the
potential for error, are difficult to understand, and make
it extraordinarily difficult for taxpayers to know whether
the benefits the provisions are intended to confer will
ultimately be available. Affected taxpayers understandably
react in anger upon discovering that they have lost --
either wholly or partially -- itemized deductions, personal
exemptions, or credits. Simplicity would be achieved by (a)
eliminating phase-outs altogether, (b) substituting cliffs
for the phase-outs, or (c) providing consistency in the
measure of income, the range of phase- out, and the method
of phase-out.
CAPITAL GAINS PROVISIONS
SIMPLIFY THE TAXATION OF CAPITAL GAINS. The capital gains
regime applicable to individuals is excessively complex. The
system imposes difficult record-keeping burdens on
taxpayers. The significant differences in rates encourages
taxpayers to engage in transactions such as investments in
derivatives or short sales in order to qualify for the lower
capital gains rates. A special rule permits taxpayers
holding property acquired before 2001 to elect to have the
property treated as if it had been sold on the first
business day after January 1, 2001, thereby becoming
eligible for the special 18% rate if it is held for another
five years. Determining whether to make this election will
require taxpayers to make economic assumptions and do
difficult present value calculations. While each item of
fine-tuning in this area may be defensible in isolation, the
cumulative effect has been to create a structure that is
incomprehensible to taxpayers and to the people who prepare
their tax returns. The taxation of capital gains would be
simplified by establishing a single preferential rate and a
single long-term holding period for all types of capital
assets.
FAMILY STATUS ISSUES, INCLUDING THE EARNED INCOME CREDIT
SIMPLIFY AND HARMONIZE THE DEFINITIONS AND QUALIFICATION
REQUIREMENTS ASSOCIATED WITH FILING STATUS, DEPENDENCY
EXEMPTIONS, AND CREDITS. Complexity in family status issues
arises because family status affects various tax provisions
designed to accomplish different ends. As might be expected,
the eligibility requirements are not identical -- and the
differences cause confusion and result in frequent tax
return errors. The provisions are so complex and varied that
we doubt that any amount of taxpayer education could ever
eliminate the errors that inevitably occur.
Family status issues are further complicated by the
increasing number of nontraditional families and living
arrangements today, a phenomenon that cuts across all income
levels but causes particular difficulty for low income
taxpayers trying to prepare their returns. Divorced parents
are much more common today than they were even 20 years ago.
When both divorced parents or multiple generations provide
some measure of assistance to the child, there are competing
claims for tax benefits relating to that child.
On top of this, many tax benefits are unavailable to married
taxpayers who file separately. This further complicates
their tax filing decisions and tax calculations -- and
increases their combined tax liability over what it would be
were they to file jointly.
Given the differing policy considerations underlying the
family status provisions, it may not be possible to develop
uniform definitions and achieve optimum simplicity. It is
possible, however, to simplify and harmonize the eligibility
criteria for many of the provisions and to establish safe
harbor tests that provide taxpayers with more certainty and
comfort. To that end, we recommend the following changes:
1. Create a safe harbor test for determining eligibility
for the dependency exemption, head of household (HOH)
status, earned income credit (EIC), child credit, and
child and dependent care credit, permitting the
custodial parent or guardian of a child to claim these
tax benefits. This would lessen the intrusiveness of
audits on eligible taxpayers while targeting cases of
fraud or abuse. In most cases, custody can be
demonstrated by court orders, separation agreements, or
government or private agency placements. Retain the
ability of the custodial parent or guardian to consent
to transfer the dependency exemption to the noncustodial
parent (or other third party).
2. Create a safe harbor test for the AGI tie-breaker rule
under the EIC (IRC section 32(c)(1)(C). Absent fraud,
the custodial parent or guardian of a qualifying child
would be deemed to maintain a separate principal place
of abode with that child and would be eligible therefore
to claim the EIC, regardless of what other adult also
resides in that residence.
3. Modify the definition of "foster child" for five
purposes: dependency exemption, HOH status, EIC, child
credit, and child and dependent care credit. The
revision would require foster children to live in the
same principal place of abode with the taxpayer for more
than one-half the year (as opposed to a full year under
current law).
4. Define "earned income" for EIC purposes as taxable wages
(Form 1040, Line 7) and self-employment income (Form
1040, Line 12, less Form 1040, Line 27).
5. Deny the EIC to taxpayers whose foreign earned income
exceeds $2,200 (adjusted for inflation) or whose AGI
exceeds earned income by more than $2,200 (adjusted for
inflation), excluding taxable social security, pensions,
and unemployment compensation (items easily taken from
the face of the tax return).
6. Apply one standard for qualification as a dependent
child and head of household status that combines support
with the cost of maintaining a taxpayer's household. Use
the same terminology in each statute to refer to this
expanded support concept.
7. Provide that certain government benefits (food stamps,
Section VIII housing subsidy, payments under the
Temporary Assistance to Needy Families program, child's
social security benefits) do not "count against" the
custodial parent in determining "expanded support" for
purposes of the dependency exemption, HOH, and the child
and dependent care credit.
8. Repeal the Child Tax Credit (IRC section 24); replace it
by increasing the amount of the dependency exemption and
expanding the child and dependent care credit.
9. Establish a uniform credit rate for the child and
dependent care credit; remove or adjust for inflation
the limitation of dependent care expenses eligible for
the credit; and make the credit refundable. Remove (or
increase) the $5,000 limit (whether joint, HOH, or
single) on dependent care expenses eligible for
exclusion (pre-tax treatment by the employer).
10. Extend HOH status to noncustodial parents who can
demonstrate their payment of more than nominal child
support. This proposal acknowledges that children often
have more than one household and that the noncustodial
parent who pays child support has a reduced ability to
pay tax. The benefit will be targeted primarily to those
taxpayers who do not itemize deductions. The proposal
also encourages the payment of child support and removes
the incentive for fraud or noncompliance under other
family status provisions.
11. Conform the treatment of married filing separately
taxpayers under family status provisions to the
treatment of similarly situated joint/single/head of
household taxpayers, unless a clear, overriding policy
reason exists for the different treatment.
ESTIMATED TAX SAFE HARBORS
RATIONALIZE ESTIMATED TAX SAFE HARBORS. Section 6654 imposes
an interest charge on underpayments by individuals of
estimated income taxes, which generally are paid by
self-employed individuals. This interest charge generally
does not apply if the individual made estimated tax payments
equal to the lesser of (a) 90 percent of the tax actually
due for the year or (b) 100 percent of the tax due for the
immediately prior year. The availability and computation of
the prior year safe harbor has been adjusted by Congress
repeatedly during the past decade. Currently, for
individuals with adjusted gross income exceeding $150,000,
the prior year safe harbor percentage increases and
decreases from year to year. The percentage was 105 last
year, increases to 108.6 in this year, and will increase in
the future to 112 percent. The purpose of these changes is
to shift revenues from year to year within the five- and
ten-year budget windows used for estimating the revenue
effects of tax legislation. An appropriate safe harbor
percentage (perhaps 100%) should be determined and applied
for all years. Consideration should also be given to
simplifying estimated taxes (for example, by the enactment
of a meaningful safe harbor) for all corporations.
EXTENDERS
MAKE THE SO-CALLED EXTENDERS PACKAGE PERMANENT. Uncertainty
in the tax law breeds complexity. The constant need to
extend certain Code provisions (such as AMT relief for
individuals, the research and experimentation tax credit,
and the work opportunity tax credit) adds confusion to the
law and, in many cases, undermines the policy reasons for
enacting the incentives in the first place. This is so
because the provisions are intended to encourage particular
activities but uncertainty surrounding whether the
provisions will be extended leaves taxpayers unable to plan
for those activities. The on-again, off-again nature of
these provisions, coupled in some cases with retroactive
enactment (which often necessitates the filing of an amended
return), contributes mightily to the complexity of the law.
These provisions should be enacted on a permanent basis.
EDUCATION INCENTIVES
HARMONIZE AND SIMPLIFY EDUCATION INCENTIVES. In today's tax
structure, there are eight different "education incentive
provisions", including tuition credits, Education IRA's,
state deductible tuition programs, limited interest
deductions, and employer provided assistance programs. In
addition, we note with dismay that a number of changes to
and expansions of these programs, as well as the
establishment of new education incentives, were recently
proposed in the Administration's FY 2001 Budget. The various
provisions contain numerous and differing eligibility rules.
For many taxpayers, analysis and application of the intended
incentives are too cumbersome to deal with compared with the
benefits received.
For example, eligibility for one of the two education
credits depends on numerous factors including the academic
year in which the child is in school, the timing of tuition
payments, the nature and timing of other eligible
expenditures, and the adjusted gross income level of the
parents (or possibly the student). Further, in a given year
a parent may be entitled to different credits for different
children, while in subsequent years credits may be available
for one child but not another. Both types of credits are
dependent on the income levels of the parents or the child
attempting to claim them. Further complicating the statutory
scheme, the Code precludes use of the Lifetime or Hope
Credit if the child also receives tax benefits from an
Education IRA. Although the child can elect out of such
benefits, this decision also entails additional analysis.
An additional complicating factor is the phase-out of
eligibility based on various AGI levels in five of the eight
provisions. This requires taxpayers to make numerous
calculations to determine eligibility for the various
incentives. Since there are so many individual tests that
must be satisfied for each benefit, taxpayers may
inadvertently lose the benefits of a particular incentive
because they either do not understand the provision or
because they pay tuition or other qualifying expenses during
the wrong tax year.
Separately, college graduates are entitled to deduct a
portion of any interest paid on student loans. The amount
deducted is limited or eliminated when AGI exceeds certain
thresholds. These phase-out thresholds are different from
the Credit and Education IRA thresholds.
Possible measures for simplifying the tax benefits for
higher education include:
1. Combine both credits into one.
2. Simplify the definition of "student".
3. Establish a single amount eligible for the credit.
4. Eliminate or standardize the income ranges required for
eligibility.
5. In lieu of the credits, grant additional exemption
amounts to taxpayers who qualify for the credit under
current law.
6. Ease the requirements for interest deduction and
coordinate the phase-out amounts with other education
incentives.
7. Replace current tax benefits with a new universal
education deduction or credit, i.e., develop one or two
education-related deductions or credits to replace the
myriad current provisions.
CAPITALIZATION, EXPENSING, AND RECOVERY OF CAPITALIZED COSTS
PROVIDE CLEAR RULES GOVERNING THE EXPENSING, CAPITALIZATION, AND
RECOVERY OF CAPITALIZED COSTS. Since the Supreme Court's decision
in INDOPCO v. Commissioner, 503 U.S. 79 (1992), whether a
particular expense may be deducted or must be capitalized has
become a particularly troublesome issue for businesses. The
National Taxpayer Advocate has confirmed that capitalization
issues are a major cause of controversy for business taxpayers,
identifying them as the most litigated issue in his 1998 Report
to Congress. The language of the INDOPCO decision has been used
by the IRS to support capitalization of numerous expenditures,
many of which have long been viewed as clearly deductible. The
core inquiry is whether an expenditure produces a "future
benefit." Expenditures producing "incidental future benefits"
remain deductible, but determining whether there is a future
benefit and, if so, whether it is incidental is rarely obvious or
easy. It is imperative that this enormous drain on both
Government and taxpayer time and resources be alleviated by
developing objective, administrable tests governing the deduction
of recurring or routine business expenses or the capitalization
of clearly defined categories of expenditures.
HALF-YEAR AGE CONVENTIONS
CHANGE THE HALF-YEAR AGE CONVENTIONS FOR RETIREMENT PLAN
DISTRIBUTIONS TO FULL-YEARS. The Code provides that retirement
plan benefits must commence, with respect to certain employees,
by April 1 of the calendar year following that in which the
employee attains age 70-1/2. It also provides that plan benefits
may not be distributed before certain stated events occur,
including attainment of age 59- 1/2. Further, premature
distributions from a qualified retirement plan, including most
in-service distributions occurring before an employee's reaching
age 59-1/2, are subject to an additional 10- percent tax. The
half-year age conventions complicate retirement plan operation
because they require employers to track dates other than birth
dates. Changing the age requirements to 70 from 70-1/2 and to 59
from 59-1/2 would have a significant simplifying effect.
MINIMUM DISTRIBUTION REQUIREMENTS
MODIFY THE MINIMUM DISTRIBUTION RULES. The tax rules concerning
retirement plan distributions (especially the minimum
distribution requirements of IRC section 401(a)(9)) are among the
most complex in the Code and present numerous traps for the
unwary. To avoid a possible 50-percent penalty where a
distribution is less than the required minimum, all but the most
sophisticated taxpayers must seek professional help to navigate
the maze of complicated rules (involving, among other things, the
potential for requiring an annual recalculation of the minimum
distribution, based on a taxpayer's changing life expectancy from
year to year). Further, an evergrowing percentage of Americans
are now in or approaching their retirement years, and untold
millions of IRA and 401(k) accounts (in addition to traditional
pension accounts) will become subject to these rules.
Simplification is badly needed.
Although the minimum distribution rules are intended to preclude
the unreasonable deferral of benefits, they are not truly needed
inasmuch as benefits deferred are subject to income taxation upon
eventual distribution and may be subject to estate taxation on a
participant's death. Thus, the provisions of IRC 401(a)(9), other
than those dealing with the required start date for
distributions, should be replaced with the incidental death
benefit rule in effect prior to the enactment of ERISA.
WORKER CLASSIFICATION
REPLACE THE 20-FACTOR COMMON LAW TEST FOR DETERMINING WORKER
CLASSIFICATION. Determining whether a worker is an employee or
independent contractor is a particularly complex undertaking
because it is based on a 20-factor common law test. The factors
are subjective, given to varying interpretations, and there is
precious little guidance on how or whether to weigh them. In
addition, the factors are not applicable in all work situations,
and do not always provide a meaningful indication of whether the
worker is an employee or independent contractor. Nor do the
factors take into consideration the differential in bargaining
power between the parties. The consequences of misclassification
are significant for both the worker and service recipient,
including loss of social security and benefit plan coverage,
retroactive tax assessments, imposition of penalties,
disqualification of benefit plans, and loss of deductions. The
relief afforded by legislative safe harbors is limited to
employment taxes. This complex and highly uncertain determination
should be eliminated and replaced with a more objective test
applicable for federal income tax and ERISA purposes.
Alternatively, changes could be made to reduce differences
between the tax treatment of employees and independent
contractors. Judicial review by the United States Tax Court of
worker classification disputes should be available to both
workers and employers.
ATTRIBUTION RULES
HARMONIZE THE ATTRIBUTION RULES. The attribution rules throughout
the Code contain myriad distinctions, many of which may have been
reasonably fashioned in light of the particular concern the
underlying provision initially addressed. It is not clear,
however, that those reasons justify the complexity they create.
The attribution rules should be reexamined in light of their
underlying concerns with the objective of harmonizing and
standardizing them. Further reexamination may permit the
development of a single uniform set of rules. Even without
reexamination, they could be simplified by standardizing
throughout the Code how the ownership percentages apply, i.e.,
whether the percentage under a particular attribution rule is
"equal to" or "greater than".
FOREIGN TAX CREDIT RULES
SIMPLIFY THE FOREIGN TAX CREDIT. The core purpose of the foreign
tax credit (FTC), which has been part of the Code for more than
80 years, is to prevent double taxation of income by both the
United States and a foreign country. The FTC rules are complex in
large measure, but not exclusively, because the global economy is
complex. The nine separate baskets for allocating income and
credits set forth in section 904(d)(1) are especially complicated
to apply, particularly for small businesses. (The basket regime
is intended to prevent inappropriate averaging of high- and
low-tax earnings.)
These rules may never be truly simple, but actions can be taken
to temper the extraordinary complexity of the current regime. At
a minimum, Congress should act to (a) consolidate the separate
baskets for businesses that are either starting up abroad or that
constitute small investments; and (b) eliminate the alternative
minimum tax credit limitations on the use of the FTC.
In addition, consideration should be given to accelerating the
effective date of the "look-through" rules for dividends from so-
called 10/50 companies. The Tax Reform Act of 1986 created a
separate FTC limitation for foreign affiliates that are owned
between 10 and 50 percent by a U.S. shareholder. The requirement
for separate baskets for dividends from each 10/50 company was
among the most complicated provisions of the 1986 Act, and in
1998, Congress acted to afford taxpayers an election to use a
"look-through" rule for dividends (similar to the one provided
for controlled foreign corporations under section 904(d)(3)). The
implementation of the rule was delayed, however, until 2002. In
addition a separate "super" FTC basket is required to be
maintained for dividends that are received after 2002 but are
attributable to pre-2003 earnings and profits. The current
application of both a single basket approach for pre-2003
earnings and a look-through approach for post-2002 earnings
results in unnecessary complexity. The "super" basket should be
eliminated and the effective date of the look-through rule
accelerated.
SUBPART F
SIMPLIFY APPLICATION OF SUBPART F. In general, 10-percent or
greater U.S. shareholders of a controlled foreign corporation
(CFC) are required to include in current income certain income of
the CFC (referred to as "Subpart F" income). The Subpart F rules
are an exception to the Code's general rule of deferral and were
initially enacted to tax passive income or income that is readily
moveable from one taxing jurisdiction to another, for example, to
take advantage of low rates of tax. Since the Subpart F rules
were enacted in 1962, they have been amended several times to
capture more and more categories of active operating income.
Nevertheless, income of a CFC may be excepted from taxation under
the Subpart F provisions under various "same-country" exceptions.
U.S.-based companies incur substantial administrative and
transaction costs in navigating the maze of the Subpart F rules
to minimize their tax liability.
The Subpart F rules were created almost four decades ago. They
sorely need to be updated to deal with today's global environment
in which companies are centralizing their services, distribution,
and invoicing (and often manufacturing operations, as well). We
recognize that the Treasury Department is preparing a study on
the policy goals and administration of the Subpart F regime,
which we eagerly await. Whatever effect this study may eventually
have, substantial simplification can be achieved now through the
following basic measures:
8. Except smaller taxpayers or smaller foreign investments
from the Subpart F rules.
9. Exclude foreign base company sales and services income
from current taxation.
10. Treat countries of the European Union as a single
country for purposes of the same-country exception.
PFIC RULES
LIMIT APPLICATION OF THE PFIC RULES. In 1997, the passive
foreign investment company ("PFIC") rules were simplified by
the elimination of the controlled foreign corporation-PFIC
overlap and by allowing a mark-to-market election for
marketable stock. A great deal of complication remains,
however, and further simplification is necessary. We
recommend, for example, that Congress eliminate the
application of the PFIC rules to smaller investments in
foreign companies whose stock is not marketable.
COLLAPSIBLE CORPORATION
REPEAL THE COLLAPSIBLE CORPORATION PROVISIONS. The repeal of
the General Utilities doctrine in 1986 rendered IRC section
341 redundant. By definition, a collapsible corporation is a
corporation formed or availed of with a view to a sale of
stock, or liquidation, before a substantial amount of the
corporate gain has been recognized. Since 1986, a
corporation cannot sell its assets and liquidate without
recognition of gain at the corporate level; likewise, the
shareholders of a corporation cannot sell their stock in a
manner that would allow the purchaser to obtain a step-up in
basis of the assets, without full recognition of gain at the
corporate level. Because it was the potential for escaping
corporate taxation that gave rise to IRC section 341, it is
now deadwood and should be repealed. Its repeal would result
in the internment of the longest sentence in the Code
FOOTNOTE
/*/ These Recommendations are presented on behalf of the
Section of Taxation. They have not been approved by the
House of Delegates or the Board of Governors of the American
Bar Association and, accordingly, should not be construed as
representing the policies of the Association.
END OF FOOTNOTE
---end quoted text
---
Ed Zollars, CPA Phoenix, AZ
ezo...@primenet.com
http://www.hmtzcpas.com
D. Stussy
> Below is the text of the joint document on ten recommended
> simplifications in the tax law presented by the American Bar
> Association Tax Section, the American Institute of Certified
> Public Accountants Tax Section and the Tax Executives
> Institute.
> [Itemized list deleted]
My comment is toward EIC: Although there may be some social
merit in giving low income taxpayers with dependents a tax
break, I still feel that the Earned Income Credit should be
repealed completely, or if kept, be made non-refundable.
Welfare for the working poor, still being WELFARE, should
not be implemented through the tax system as a NEGATIVE tax
collection.
The EIC was, until recently, the only tax credit which
either doesn't represent an expense paid or the recapture of
a tax paid by the taxpayer. [The refundable version of the
child credit is the other - but even in that case, there is
an "expense" of sorts.] I'm NOT against giving these
taxpayers a break - but I am against the EIC being a
refundable credit. It should be non-refundable and merely
allow a taxpayer to lower his/her tax to zero (potentially)
- thus owing nothing. Beyond that point, it's welfare
assistance, which should be accounted for as a government
payment, and NOT a negative tax collection.
Only the U.S. Government would implement a tax system where
they could be called to potentially pay out more tax than is
collected (a worst case where every american found
themselves eligible to claim EIC!).
Michael T. Wing, CPA
> Below is the text of the joint document on ten recommended
> simplifications in the tax law...
Gee...and I actually agree with most of them (except the
foreign-related issues, on which I have no opinion).
My sole reservation is with respect to their capital gains
recommendation. It would be *simpler* - not to mention
*fairer* - to simply repeal *all* special treatment of
capital gains. The recommended setting of a *single*
preferential tax rate (say, 18%) will unreasonably benefit
the rich and/or punish the poor (who are already in even
lower brackets).
Perhaps they meant to say that we should return to the days
of allowing a partial *exclusion* with respect to capital
gains. But, they *didn't* say that - and accordingly I'm
tempted to conclude that some of their other recommendations
are similarly "biased" in favor of the "republicans". <g>
MTW
Michael T. Wing, CPA (WA) - [www.versatax.com]
Ed Zollars
> But, they *didn't* say that - and accordingly I'm
> tempted to conclude that some of their other recommendations
> are similarly "biased" in favor of the "republicans". <g>
Except, I always thought the ABA was constantly accused of
having Democratic sympathies...
In any event, I wouldn't worry too much about any of these
becoming law--reality is that *NOBODY* running for office
truly cares about simplification. By cares, I mean is
willing to go to bat for that without reservation, because
the minute we start introducing special deductions,
exclusions, credits, rates, etc., we lose simplification.
As that document noted, almost *ALL* of the specific items
mentioned have a rationale to support them, and creating the
simplification is going to require trading off some other
worthy goal that is near and dear to some Congress-critter's
heart. So only if we get representatives who focus *SOLELY*
on simplification is there any real chance to see any.
Let us not forget that the same Congress that was preaching
simplification in 1996 went out and produced one of the most
complex bills ever created in 1997. And while I know the
defense is that the Administration "made" them do it,
reality was that they didn't have to pass a bill.
Similarly, Clinton signed the bill and, again, would blame
the complexities on what Congress wanted--but the reality
was that he didn't have to sign it. Until someone is willing
to truly stand up for simplification against all other
claims, we aren't likely to see it.
For now, we have a tax law that nobody claims responsibility
for, but which continues to grow more complex each year.