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Editorial
Meaningful tax reform unlikely to follow 2016 election
Thursday, November 5, 2015
The American tax system is based on honesty and voluntary compliance.
When you stop laughing, consider the taxes you, as an honest citizen, are paying to make up for those who are less than honest, as well as interest on the national debt.
Thanks to reduced funding for the IRS, the amount of money the government has recovered from non-compliant taxpayers is the lowest its been since 2004.
You have only a 0.84 percent chance of being audited, a drop of 22.3 percent from 2010.
That means IRS auditors have brought in only $7.32 billion in additional revenue this year, about half the average between 2005-2010.
The same can't be said for cyber thieves, who hacked into IRS servers to steal personal information and collect as much as $39 million in fraudulent tax refunds.
As things stand now, the United States is expected to collect $3.2 trillion in taxes in 2015 and spend $3.7 trillion, according to the Congressional Budget Office.
The tax system looks to be fertile ground for harvesting votes in the 2016 election, but are any candidates planting seeds in that field?
Ben Carson is advocating a system based on biblical principals -- A flat income tax rate of 10 to 15 percent, phased in over time, with no deductions or loopholes; a six-month tax hiatus for corporate profits overseas, but 10 percent has to be used in enterprise zones; a corporate tax rate of 15 to 20 percent and elimination of the payroll tax, estate tax and the Affordable Care Act.
Critics say his plan would require a 40 percent budget cut to deal with a $1.1 trillion gap, but he disputes those figures.
Donald Trump would cut individual and corporate tax rates and simplify the current tax code, cutting taxes by nearly $12 trillion over the next decade, but increasing the deficit, according to analysts.
Hillary Clinton has concentrated on capital gains, replacing the current system with a maximum 20 percent on long-term gains.
Socialist Bernie Sanders would lower the estate tax exemption and raise the top estate tax rate from 40 percent to 55 percent.
Most candidates favor some sort of tax code simplification, but real reform is likely to be lost in the glare of the superficial issues that pass for meaningful topics of debate during a modern presidential election.