In Simplifying Tax Code, How Do We Get Back to Fundamental Values?

ANALYSIS    
AIR DATE: April 12, 2013

SUMMARY

With tax day looming, tax reform is in the air. In his budget, President Obama introduced several proposals aimed at simplifying the tax code. David Cay Johnson, columnist for Tax Analysts magazine, and economist Douglas Holtz-Eakin join Jeffrey Brown to debate different strategies and whether real tax reform is possible.
 
Transcript

JEFFREY BROWN: Yes, taxes are due on Monday. And, yes, once again, tax reform is in the air. It's been more than a quarter-century since the last overhaul, and now President Obama and key leaders in both parties say they'd like to work on simplifying the tax code.

But if the past is a guide, that it's much easier said than done. This week, the president brought back some of his longstanding proposals as part of his budget. They include capping itemized deductions and exemptions, such as the mortgage interest and charitable deductions, for wealthier households earning $250,000 dollars or more, tax increases on the foreign earnings of American companies, and a rise in taxes to at least 30 percent for individuals earning a million dollars or more.

We take a look at all of this now with David Cay Johnston, a columnist for Tax Analysts magazine and professor of law at Syracuse University College of Law, and Douglas Holtz-Eakin, an economist and president of the American Action Forum.

David Cay Johnston, let me start with you, and start with personal taxes that so many people face a deadline on. Help us think about possible reforms. What is the biggest problem with the system right now?

DAVID CAY JOHNSTON, "The Fine Print": Well, for most people, it is that they shouldn't have to file.

The government has all the information it needs for people who only get income from wages or pensions. And so if we excluded a small amount of money from dividends and interest, which we did do in the 1970s, we could eliminate tax filing for about 100 million of the 140 million people. So that is at the bottom end.

Continue at:

http://www.pbs.org/newshour/bb/business/jan-june13/taxes_04-12.html