How can a tax code be broken?

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The only thing I care about is how much I have to pay. If a politician says he will lower my taxes, while I don’t believe it for a minute, that person has my vote. — one woman’s opinion explaining her intention to vote for RMN

This is Mike from Micro. Your computer is broken, but I can fix it.–Heard all too often on the telephone

Tom Reed and the House Ways and Means Committee want to convince us that our federal tax code is broken. They plan to tell us that 31 times this month. Repetition is convincing, but how can a tax code be broken?

I can imagine a broken egg, a broken leg, and a broken heart, but not a broken tax code. How can a body of law, which is an idea rather than a thing, be broken?

If the tax code is broken, when did it happen, who broke it, and who can fix it? Possibly it was broken by Congress? The tax code was created by Congress over decades. It may have always been broken, because Congress has never ceased changing it. The current tax code is the result of uncounted incremental changes, the same process that some now suggest for improving Obamacare. Good luck with that–if incremental changes broke the tax code, incremental changes will likely break Obamacare.

If Congress broke the tax code, why do we think they can fix it?

How is the tax code broken? Here is what they suggest in the first week of August:

  • Our broken tax code is a drag on our economy.  (W&M)
  • Taxpayers spend $99 BILLION a year complying with the individual income tax. (Tom Reed)
  • Americans deserve to keep more of their paychecks (W&M)
  • Tax reform will mean more jobs for hardworking people. (Tom Reed)
  • America’s tax code is now more that 2.4 million words long  (W&M)
  • Family-focused credits are too complicated. (W&M)
  • Tax reform will enhance US Manufacturing – an important industry in our region. (Tom Reed)

What is important to this taxpayer is how much I owe; none of the above directly addresses that. Can any of the above be taken at face value?

Perhaps the tax code isn’t so much broken as in need of improvement. How might Congress fix it? Assuming changes are revenue neutral, only by changing what taxpayers owe, most likely by:

  • Shifting taxes from businesses to individuals.
  • Shifting taxes from the wealthy to the rest of us.

Can those who suggest that everyone can pay less without harmful consequences be trusted? I think not.

https://waysandmeans.house.gov/31reasons/

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About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
This entry was posted in Reed's Views, Taxes. Bookmark the permalink.

5 Responses to How can a tax code be broken?

  1. whungerford says:

    On Aug 8 we learn how much businesses spend on taxes according to the Tax Foundation. Some of this money is doubtless spent on avoiding taxes. W&M suggests this money might be better spent on something else–engineers rather than accountants possibly. This would be good for engineers, bad for accountants, and likely a wash for the economy.

  2. whungerford says:

    On Aug. 9 we are told there are too many tax brackets. Tax rates should be flatter, they say. Flat means those who have more than they need would pay less, those who have less would be asked to pay more. This is the opposite of what is needed for prosperity.
    https://philebersole.wordpress.com/2017/08/09/how-inequality-is-growing/

  3. whungerford says:

    On Aug. 10 we are told that America has the highest corporate tax rate in the industrialized world. We are not told that tax loopholes allow many corporations to avoid all taxes–few pay at the statutory rate.

  4. whungerford says:

    On Aug. 11 we are told that the cost of filing business tax returns affects productivity. This is unlikely–it would have a small effect only if the work to file tax returns is wasteful.

    On Aug. 12, we learn that our broken tax code punishes us for hard work with high rates, uncertainty, and complexity. Yep, surely many layabout instead of working for fear of taxes.

    The W&M committee is responsible for tax legislation. When they explain their work with misleading partisan propaganda, they fail to inspire confidence.

  5. whungerford says:

    On Aug. 13 the message is that lower corporate taxes will encourage investment, create jobs, and increase wages. It doesn’t mention that the current tax code provides credits for investment.

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