7 Innovative Tax Reform Proposals

Tax reform is a lot like the weather.

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Tax reform is a lot like the weather. There’s plenty of talk about revamping the tax code, but very little seems to get accomplished. However, in the past few months, both chambers of Congress have held hearings on tax overhaul. And, just this month, President Obama and Paul Ryan, Chairman of the House Budget Committee, each introduced deficit reduction proposals that include tax reform ideas.

There is widespread agreement that the current tax code is too complex (for instance, almost 4,500 changes have been made to the tax code in the last ten years) and provides large subsidies for activities that lawmakers and lobbyists want to favor, such as home ownership, and that the top corporate income tax rate is high relative to other countries around the world.

But there is no consensus on how to fix what ails it. Remember, any reform creates both winners and losers, and the losers will squawk long and hard about losing cherished tax breaks.

As part of the discussion, lawmakers and policy wonks have proposed a number of alternatives for revamping the tax system. Take a look at some of the ideas and our assessment of their chances.

Joy Taylor
Editor, The Kiplinger Tax Letter

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to kiplinger.com and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.