Tax Code Reform...Don't Speak It or It will Disappear

Imagine:   Tax Reform is again on the table!!

Frankly, we may be fortunate that the Russians stepped in to take the steam out of Syrian challenge so that Congress can address the Budget dilemma that has been kicked down the street for a couple of years now.

I know this update from Al Clark's Home Action says Tax Reform is under discussion.  Yet, I have to admit that I will believe it when I see it.  

Topic Summary: Now that the Syrian crisis is calming down, Members of Congress are getting ready for a contentious battle to over haul the tax code and lower overall tax rates.

Did you know that the current tax code for companies and individuals is 74,000 pages long? Nina Olson, the National Taxpayer Advocate, agrees. She said complexity is the biggest problem taxpayers face and her report indicates that American taxpayers spend over 6 billion hours and $168 billion every year to comply with the code.

Over the last few months there have been hearings and focus group meetings aimed at forging a consensus that the time is right to gut the tax code and start over. To this end, tax writers are shooting for late November to have a framework to start with. Every Member of Congress has their "pet" deductions as well as a slew of lobbyists who want their tax preference protected. It will get messy!

The intention of tax reform is not only simplification but actual taxpayer savings. Currently there are 7 tax rates for individuals starting at 10% and moving up to 39.9%. Many in Washington are pushing to cut or severely diminish many deductions such at the mortgage interest deduction and capital gains exclusions. If successful in reducing tax breaks, (thus more revenue) individual tax rates can be reduced to just two brackets, 10% and 25%.

The two lawmakers tasked most with writing tax laws - Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman David Camp, R-Mich. - have endorsed a "blank slate" approach to tax reform, eliminating all tax breaks and forcing Members of Congress to justify adding them back in. They were on a bipartisan summer tour of the country to get input from taxpayers and sell the concept.

So to simplify, all tax breaks that homeowners receive (here are the top ten) are on the table and getting special focus.  HomeActions will keep you informed as the process gains momentum

Tax Reform --- Call to Action

Have thoughts on the Tax Code in the USA???

It appears the Senate Tax Writers are starting from scratch. Using a blank slate, "The intent is to lower tax rates that in turn will stimulate the economy".

Call me a pessimist but I have heard that before!

SPECIAL EDITION: CALL FOR ACTION… TELL THEM HOW YOU FEEL! Credit to Al Clark...for this article!!

Topic Summary: Tax Reform Engaging Congressional LeadersTax Reform is underway on Capitol Hill. The Senate tax-writers have adopted a "Blank Slate" approach that initially eliminates every provision in the tax code, including those that are cherished by homeowners and future homeowners.  The intent is to lower tax rates that in turn will stimulate the economy. From a website created for the effort:  "In order to make sure that we end up with a simpler, more efficient and fairer tax code, we believe it is important to start with a "blank slate" -- that is, a tax code without all of the special provisions in the form of exclusions, deductions and credits and other preferences that some refer to as "tax expenditures." This blank slate is not, of course, the end product, nor the end of the discussion.... We plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives." The Democratic and Republican leaders of the Senate Finance Committee recently began a legislative push to simplify the tax code by asking all Senators to make a case for including special tax breaks. Senator Max Baucus, on the left, and Senator Orrin Hatch want to start work on the tax code by clearing it of special breaks, unless those breaks meet specific goals.  In the House, the committee that works on tax measures is called the Ways and Means Committee and it is headed up by Dave Camp, (R-Mich). This Committee hasheld many hearings on tax reform and has built "working groups" to arrive at a game plan for tax reform Normally Senators are tasked with the need to eliminate tax breaks but Senator Baucus and Senator Hatch thought that it is easier for Senators to come up with their list of deductions and breaks they want SAVED. Every  $2 trillion in individual tax breaks added back to their "blank slate" would raise tax rates 1.3 to 2.2 percentage points. In other words, Senators must decide between popular tax breaks and low income tax rates. It's easy to see how all consumers could benefit from comprehensive tax reform.