Paul L. Caron

Wednesday, November 18, 2020

Cauble: Superficial Proxies For Simplicity In Tax Law

Emily Cauble (DePaul), Superficial Proxies for Simplicity in Tax Law, 53 U. Rich. L. Rev. 329 (2019):

Simplification of tax law is complicated. Yet, political rhetoric surrounding tax simplification often focuses on simplistic, superficial indicators of complexity in tax law such as word counts, page counts, number of regulations, and similar quantitative metrics. This preoccupation with the volume of enacted law often results in law that is more complex in a real sense. Achieving real simplification—a reduction in costs faced by taxpayers at various stages in the tax planning, tax compliance, and tax enforcement process—often requires enacting more law, not less. In addition, conceptualizing simplicity in simplistic terms can leave the public vulnerable to policies advanced under the guise of simplification that have real aims that are less innocuous. A perennial example involves lawmakers proposing a reduction in the number of tax brackets under the heading of simplifying tax law. In reality, this change does very little, if anything, to simplify law in a meaningful sense, and its truer aim is to reduce progressivity in the tax code.

Although the tax legislation ultimately enacted in December 2017 did not change the number of brackets applicable to individual taxpayers, political discourse preceding its enactment once again touted a reduction in the number of tax brackets as a simplifying measure.

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Anybody who has worked in the trenches for a few year can give you a "Top-Ten" list of tax simplification ideas. First, off the top of my head is doing away with capital gains taxation. Simply make capital gains taxable as ordinary income and capital losses fully deductible.

Next, delete everything below AGI, i.e., AGI becomes taxable income.

Then go back and adjust the tax rates to make these changes revenue neutral, and you would have a tax system the IRS can handle.

Easy peasy.

Never happen, though.

Posted by: Dale Spradling | Nov 18, 2020 10:40:37 AM