Tax Simplification Bill Proposed In US

by Mike Godfrey, Tax-News.com, Washington

25 July 2002

In the wake of the introduction of House Ways and Means Committe Chairman, Bill Thomas' behemoth of a tax bill, another member of the Committee has decided to take a swing at the US tax code.

Republican Congressman Rob Portman recently introduced the Tax Simplification Act of 2002, a package of legislation which, if passed, will dramatically simplify the tax code for many ordinary taxpayers.

'Our current tax code is a mess,' the Ohio Congressman explained. 'It is filled with provisions that are complicated, confusing, and contradictory. My legislation will take significant steps toward making our tax code simpler so that taxpayers can spend less time calculating their taxes.'

Amongst the changes contained in the Portman bill - which aims to simplify matters for both families and businesses - are the elimination of the controversial Alternative Minimum Tax (AMT), the simplification of capital gains calculations by adopting a uniform percentage deduction in lieu of multiple tax rates, and the creation of a 'small savers' exemption which would exempt the first $500 of dividend or interest income from tax.

The proposals would also simplify some of the US tax code's most confusing provisions, according to the bill's author. Citing the fact that there are currently five different definitions of 'qualifying child', and nine definitions of 'qualifying higher education expenses' as an example, Portman explained that:

'Every American knows what a child is, yet the tax code defines child in five different ways. This is the type of thing that makes tax forms a nightmare to fill out, and that is why my legislation will create unified definitions in the tax code.'

He concluded: 'American taxpayers are tired of the mountains of forms and instructions thry must read every year just to calculate their income taxes. My tax simplification bill will restore some sorely needed common-sense to our tax code.'

Recommended