The TAS Approach to Tax Reform

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If you recently read (or re-read) the unabridged English version of Les Misérables in anticipation of the movie that came out on Christmas day, your eyes consumed approximately 531,000 words.  This is slightly less than the word count in the Bible, which is somewhere between 800,000 – 900,000 depending on who you ask.  And if you can even imagine it, the US Tax Code contains about 4 million words!  That is almost 4 times the length of the entire Harry Potter series!

Practically everyone agrees that our tax code is too complicated, too detailed, and too long.  Tax reform and simplification was the top concern expressed by Nina Olson, National Taxpayer Advocate, in her annual report to Congress.  The complexity of the tax code breeds a number of negative consequences, including uncertainty for those with tax questions and unfair results for those seeking tax relief.

The strategy that the Taxpayer Advocate Service (TAS) recommends is to start with a clean slate by wiping out all “tax expenditures” such as exclusions, exemptions, deductions, and credits.  Then lawmakers would need to methodically decide what is absolutely necessary before bringing it back.  TAS calls this a “zero-based budgeting” approach.

I would call this the “messy closet” approach, and I like it.  Sometimes a closet gets to the point where the only way you can regain order is by taking everything out and starting over.

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