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Is tax reform at hand?

Posted: February 24, 2011 12:15 p.m.
Updated: February 25, 2011 5:00 a.m.

With April 15 approaching, Kershaw County taxpayers are bundling their records together and preparing to report to Uncle Sam. In most cases, they’ll be hiring someone to prepare their tax returns because the tax code in this country is so blindingly complicated that a layman has no chance of understanding it. Many tax professionals can’t even understand it. But in Washington, there’s finally talk of comprehensive tax reform. That, of course, doesn’t mean our elected officials in the nation’s capital will accomplish anything, but conditions are ripe. We have a Republican-controlled House and a Democratic-controlled Senate, along with a Democratic president. All of them seem to agree that something needs to be done.

One of the things that makes the tax code so obtuse is the huge number of exemptions and special treatments. Many in Washington are ready to toss most of those out in return for lower taxation rates. And one thing that is getting at least a hint of conversation is a consumption tax. Some argue against it because they say it discriminates against the poor, but safeguards can be put into place to prevent that. One of the benefits is that it would greatly reduce this country’s under-the-counter economy -- people who deal in cash and don’t report it to the government. By taxing spending rather than income – those black-market entrepreneurs wouldn’t suddenly start burying their money in the back yard -- Uncle Sam could take advantage of money that presently isn’t being reported.

Nothing’s simple, of course, and reforming the tax code is going to be complex. But at least it’s a topic of conversation now, and that’s a decent start. It’s been a quarter-century since the last major revision under President Reagan. That’s long enough to wait.

 

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