Sunday, December 12, 2010
Tax Reform --not just cuts -- Needed
Many people have started viewing tax reform as a way to fix the U.S. economy. A tremendous amount of attention has been drawn to this subject because even with the lower tax rates, tax bills might rise due to closing loopholes and the removal of deductions and credits. Ben Bernanke believes that the current tax code is not efficient and stated that, "By closing loopholes and lowering rates, you could increase the efficiency of the tax code and create more incentives for people to invest". There are a lot of people that believe tax reform is one of the largest factors in deficit reduction. This belief is justified by the thought that the best way to increase government revenue is to do so through a more efficient tax system.
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I think that this is something that should be done. I am glad that the tax cut has been extended but we also need to make sure that there is a way to keep people, or get people to invest the money they are saving from their taxes.
ReplyDeleteHaving a more efficient tax reform system could end up costing the american tax payer more as well as add to growing unemployment as more people would be able to file taxes themselves. These loopholes create an industry for many CPA's that help file for the average american individual. But then again in the political realm a simpler tax system that can raise revenues additionally might be easier to pass then an all our raise in the tax braket. I suspect that the discussion of closing tax loop holes will not happen in the short term but rather in the coming years once the United States is well on its way to a sustained recovery.
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