NCPA - National Center for Policy Analysis

Tax Simplification Won't Be Simple

April 26, 2001

Few Americans -- be they tax experts or just taxpayers -- would defend the present U.S. tax code. All acknowledge that it must be simplified. But there is less agreement as to how that should be accomplished.

Experts have a laundry list of suggested changes. Among them:

  • Economist William A. Niskanen, chairman of the Cato Institute, wants to get the tax system out of the business of deciding who is a family and, instead, tax individuals -- then we would "not need special provisions on marriage penalties."
  • Repeal the alternative minimum tax -- which was designed to apply to wealthy individuals -- but because of inflation, is increasingly impacting middle-income earners.
  • Parents, students and the working poor have been accorded tax breaks which have income limits -- creating high marginal tax rates at even modest income levels. Those limits should be removed, some tax specialists argue.
  • Even longtime tax preparers complain that the Schedule D needed to report capital gains has become mind-numbingly complex and should be replaced by a simple, one-line reporting requirement.

Source: David Cay Johnston, "Moving Simplification of the Tax Code Toward the Front Burner," New York Times, April 26, 2001.


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