It’s time for tax reform
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