Reforming the current tax code

U.S. Congressman Sam Graves

This month I have been talking about the various options for reforming the tax code. We have already discussed ideas to scrap the current tax code and simplify paying your taxes with a flat or fair tax. The third major option is to reform the current tax code.

The President’s Tax Reform Commission offered two proposals. Both proposals call for the elimination of the Alternative Minimum Tax (AMT) and would consolidate, eliminate or reduce many tax credits and deductions. Both plans would eliminate the personal exemption, the standard deduction and the child tax credit, and replace them with a “family credit” worth $3,300 for married couples, $2,800 for unmarried couples with children, $1,650 for single taxpayers, $1,150 for dependent taxpayers. There would be an additional $1,500 credit for each child and $500 credit for each other dependent.

The first proposal was called a “simplified income tax plan.” It reduces the number of tax brackets to four – 15 percent, 25 percent, 30 percent and 33 percent.

The second proposal was called a “growth and investment tax plan.” Under the second plan, there would be three tax brackets – 15 percent, 25 percent and 30 percent.

The Administration is currently writing legislation that incorporates those suggestions. My goal for tax reform was a system that was simple, fair and promotes economic growth. While I believe these reforms would simplify our taxes; I believe that we must go farther with tax reform than just nibbling around the edges.