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Monday, Aug. 29, 2016

Prospect for tax reform is unlikely

Wednesday, October 19, 2005

It appears likely that tax reform is more a campaign promise than a practical goal. The much-anticipated report from the Federal Tax Reform Committee is expected this week. But early indications are that the group will make few, if any, fundamental changes to the tax code that frustrates taxpayers year in and year out.

I had great hopes for the tax reform movement. Apparently, I dream too much.

The tax reform group had been asked to consider eliminating income taxes and replacing it with a national sales tax. There was also a question of a value added tax - like much of Europe - that would reduce income taxes. But it looks like both proposals have gained little ground. So it's back to the confusing mess we call income taxes.

The problem of course is obvious. About half of Americans pay no taxes at all. At the same time, those on the extreme upper end of the income scale know how to reduce their tax load with a variety of deductions that are all perfectly legal. That leaves hard-working Americans to bear much of the tax burden. You would think reform would be a high priority. Apparently not.

Too few taxpayers currently are responsible financially for far too many who pay little to no taxes. There must be a system that is fair to all, that recognizes some will never pay taxes but that also does not punish those who work their way up the financial ladder. It is truly a delicate balance, that's for sure.

There should be reform in the Earned Income Credit which is abused by too many people. It allows taxpayers to work a minimal amount and then receive a large tax refund. This provision of the tax code is a good plan but it should be reformed. Some people work the minimum amount required to qualify and then wait for their refund check. I know that for a fact.

The ultra-upper tax bracket in this country bears too much of the load. But that bracket gets no sympathy and they will likely always carry that financial burden.

Leave it to the federal government to complicate the income tax code in a way that is beyond the understanding of most of us. Yet given the chance for reform, we get deja vu all over again.

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Michael Jensen
Michael Jensen