Tax Brake with Robert G. Nath, Esq.

Among other items, the proposals will repair the Earned Income Tax Credit. As CCH (a tax reporting and research service) put it:

O'Neill said that the earned income tax credit (EITC) "is so unbelievably complicated." Because it is complicated, taxpayers make millions of mistakes every year and, every year, Congress allocates millions of dollars to go after the people making the mistakes. He said that the system should not "hold taxpayers up for ridicule for not filling out the forms correctly."

"If the tax code is so complicated that a well-educated person cannot understand it, then we are in danger of losing a tap-root of democracy," O'Neill stated. He explained that, in a democracy, people must be able to understand the income and expenditures of their government in order to have trust in that government to carry out the people's business. That is why fundamental tax reform must "wash away most of what we've got."

The reform proposals would do away completely with the alternative minimum tax and even the corporate income tax. And, it would take a hatchet to many other deductions, exemptions, and credits. This type of approach is far from new; economists, including Nobel Prize winners, have proposed it for many years. However, to place the weight of the Administration behind such an approach is in fact new, since prior “reforms” had essentially nipped at the edges.

If this series of reforms comes to the public as revolutionary as it appears, and is enacted, the need for a huge IRS machinery to enforce an impossible-to-understand tax code would be reduced.