It’s time for tax re­form

The Citizens' Voice - - Editorial -

Edi­tor: The time for tax re­form is now, and mem­bers of the Penn­syl­va­nia In­sti­tute of CPAs en­cour­age Congress to ad­dress the core is­sues of good tax pol­icy. Com­pli­ance hur­dles for tax­pay­ers, ad­min­is­tra­tive com­plex­ity, and en­force­ment chal­lenges for the IRS are pri­mary ob­sta­cles in need of change.

Mak­ing the busi­ness case for the need for change, CPAs note that the last tax re­form pack­age was passed more than 30 years ago, and the year-by-year fixes over that time have made it chal­leng­ing for busi­ness own­ers and en­trepreneurs to strate­gi­cally grow their busi­ness. New reg­u­la­tions and ex­ten­der bills passed an­nu­ally make it dif­fi­cult for tax­pay­ers to man­age their tax obli­ga­tions. When cash flow is un­cer­tain, it af­fects a busi­ness owner’s abil­ity to hire and ex­pand. Amer­ica’s en­trepreneurs need a tax code that is sim­ple, trans­par­ent, and cer­tain.

CPAs have long ad­vo­cated for a tax sys­tem that uses a con­sis­tent def­i­ni­tion of tax­able in­come with­out any phase­outs. New tax leg­is­la­tion should pro­vide a clear def­i­ni­tion of tax­able in­come, sim­ple and trans­par­ent tax rate sched­ules that are ap­plied con­sis­tently across all rate brack­ets, and elim­i­na­tion of ad­di­tional sur­taxes. A tax­payer should un­der­stand their tax obli­ga­tion and be able to plan ac­cord­ingly.

Penn­syl­va­nia CPAs be­lieve in good tax pol­icy, and use 10 guid­ing prin­ci­ples, as out­lined in the PICPA’s “Guid­ing Prin­ci­ples of Good Tax Pol­icy” when an­a­lyz­ing a tax law or tax change. Some of these prin­ci­ples in­clude eq­uity and fair­ness, ef­fec­tive tax ad­min­is­tra­tion, sim­plic­ity, and eco­nomic growth and ef­fi­ciency.

This frame­work can help pol­i­cy­mak­ers build an ef­fec­tive roadmap to an­a­lyze pro­pos­als ad­dress­ing changes to ex­ist­ing tax laws and has been shared with all mem­bers of the Penn­syl­va­nia del­e­ga­tion to Congress.

Joseph E. Seib­ert, CPA Pres­i­dent Penn­syl­va­nia In­sti­tute of CPAs PHILADEL­PHIA

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