Burgeoning support for Tax Simplification Act, sponsored by Rep. Portman (R-Ohio), demonstrates popular support for dramatic tax reform and simplification.
WASHINGTON – Tax day has come and gone, but taxpayers, besieged by literally hundreds of thousands of regulations written into the tax code, have not given up the cause of reform.
So came cheers last week when Rep. Rob Portman (R-OH) introduced legislation on July 18 to simplify dramaticall taxes for families and businesses. The Tax Simplification Act of 2002 aims to reduce the amount of time taxpayers spend calculating their taxes.
"It\’s been fifteen years since Congress went through and simplified the tax code," said taxpayer advocate Grover Norquist, who heads Americans for Tax Reform (ATR) in Washington, "and those years have seen the tax code balloon in complexity and intensify its unfairness. Congressman Portman, bless him, has authored a good bill to remedy all of this."
Portman\’s bill contains three main elements. Because the current tax code offers multiple definitions of basic terms like \’qualified child\’ and \’qualified higher education expense,\’ – confusing to tax lawyers, let alone taxpayers – Portman introduced provisions to clearly and consistently define such terms. The Act also eliminates around 90 archaic measures that will shorten the tax code.
The bill would also eliminate the Alternative Minimum Tax (AMT), which was originally designed to prevent wealthy individuals from exempting away all tax liabilities. Now, the AMT affects mostly middle-class Americans and is expected to affect 35.5 million people by 2010. Eliminating the AMT protects middle-class Americans and business owners from a very serious form of double taxation.
Portman\’s bill also replaces the multiple capital gains tax rates with one simple rate. And to benefit small savers, it grants an exemption of $500 on interest or dividend earnings for all taxpayers. This measure will help encourage investment and savings across income groups.
Elements of the Tax Simplification Act of 2002 mirror the efforts of ATR and several Congressional caucuses. ATR has pushed hard for members of Congress to enter the Abolish AMT and Zero Capital Gains Tax caucuses, which have 16 and 56 members, respectively, and which seek to eliminate those taxes outright.