It’s Fix The Tax Code Friday!
One of the points that was stressed repeatedly in the presidential debates is the complexity of the Tax Code. Almost all candidates agree that some kind of tax reform is needed but there are differing views of what that reform should look like (you can see a brief overview of the types of tax plans here).
A consistent obstacle in the road to tax reform is the dependency on tax deductions. We like our tax deductions. Making a tax plan more simple would mean letting go of some of those deductions. Making a tax plan very simple – like a pure flat tax – would mean letting go of all of those deductions.
What sorts of tax deductions do taxpayers typically benefit from? Here’s a short list:
- Medical and Dental Expenses
- State and Local Income Taxes
- Sales Taxes
- Real Estate Taxes
- Home Mortgage Interest
- Charitable Contributions
- Job Search Expenses
- Unreimbursed Business Expenses
- Investment Expenses
- IRA Deduction
- Home Office Deduction
- Business Use of Car
- Business Travel Expenses
- Business Entertainment Expenses
- Educational Expenses
- Employee Business Expenses
- Casualty, Disaster and Theft Losses
So, today’s Fix the Tax Code Friday question is:
If we scrapped all of the deductions under the Tax Code except one, which one would you want to hold onto?
