Keep It Simple
Is tax simplification in the cards? There's a lot of talk but little action. "Every time lawmakers try to simplify the code, tax laws just get more complicated," says Paul Gada, a tax analyst with CCH Business Owner's Toolkit, a division of Riverwoods, Illinois-based tax and business law information provider CCH Inc.
The latest development comes from the Bush administration, which announced that tax simplification will be an important part of its tax agenda. Also, Nina E. Olson, the national taxpayer advocate, recently concluded in a report to Congress that federal tax laws are too complex.
Last year, the Joint Committee on Taxation submitted to Congress a report outlining complex provisions of the code. The report recommends 100 steps Congress could take to make the code more manageable.
Business owners have their own list of priorities, which include modernizing the code's depreciation rules. Under existing law, businesses write off the cost of capital expenses over five years. Now, a coalition of 35 companies is pushing for legislation that would allow businesses to deduct the entire cost of high-tech machinery in the year it is purchased.
As tax simplification proponents continue their drive, they must gather support from both sides to win passage for at least some of the changes. Partisan politics, however, continue to gather strength, which means less bipartisan cooperation and an uncertain future for simplification.
Great Falls, Virginia, writer Joan Szabo has reported on tax issues for more than 14 years.
- CCH Business Owner's Toolkit
(847) 267-2743, http://www.toolkit.cch.com