|TAX REFORM: BACK ON THE FRONT BURNER VERY SOON|
Topic Summary: Now that the Syrian crisis is calming down, Members of Congress are getting ready for a contentious battle to over haul the tax code and lower overall tax rates.
Did you know that the current tax code for companies and individuals is 74,000 pages long? Nina Olson, the National Taxpayer Advocate, agrees. She said complexity is the biggest problem taxpayers face and her report indicates that American taxpayers spend over 6 billion hours and $168 billion every year to comply with the code.
Over the last few months there have been hearings and focus group meetings aimed at forging a consensus that the time is right to gut the tax code and start over. To this end, tax writers are shooting for late November to have a framework to start with. Every Member of Congress has their "pet" deductions as well as a slew of lobbyists who want their tax preference protected. It will get messy!
The intention of tax reform is not only simplification but actual taxpayer savings. Currently there are 7 tax rates for individuals starting at 10% and moving up to 39.9%. Many in Washington are pushing to cut or severely diminish many deductions such at the mortgage interest deduction and capital gains exclusions. If successful in reducing tax breaks, (thus more revenue) individual tax rates can be reduced to just two brackets, 10% and 25%.
The two lawmakers tasked most with writing tax laws - Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman David Camp, R-Mich. - have endorsed a "blank slate" approach to tax reform, eliminating all tax breaks and forcing Members of Congress to justify adding them back in. They were on a bipartisan summer tour of the country to get input from taxpayers and sell the concept.
So to simplify, all tax breaks that homeowners receive (here are the top ten) are on the table and getting special focus. HomeActions will keep you informed as the process gains momentum