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Archive for Thursday, April 26, 2001

Congress urged to simplify tax code

April 26, 2001

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— Filling out tax returns would become simpler for most Americans if Congress scrapped rules that phase out tax breaks as incomes rise, a congressional report says.

Among the tax breaks that should be made universal are the $500 child credit, itemized deductions and credits for child care and education, the bipartisan Joint Committee on Taxation recommended Wednesday.

Taxes such as the alternative minimum tax and century-old telephone excise tax have outlived their usefulness and should be abolished, the committee said.

The 1,300-page report marks one of the most comprehensive efforts to show Congress how to simplify a tax code that now consumes nearly 1.4 million words, generates 650 tax forms and 13,000 pages of explanation, and increasingly leads people to seek professional tax help.

The result, according to the committee: It is more costly for taxpayers to comply with the law; allows those with means to find ways to evade taxes; and increases the perception that the tax code is unfair. In addition, it becomes more likely that the Internal Revenue Service will make mistakes in administering the laws.

Treasury Secretary Paul O'Neill, who has complained about the complexity of the tax code, welcomed the congressional report. "It makes clear that there is a desperate need for reform," O'Neill said in a statement. "Taxpayers are forced to spend too much time and money trying to comply with the tax laws. We are worthy of better."

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