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Decoding the Tax Code

CBS Marketwatch reports that New Hampshire Republican Senator Judd Gregg and Oregon Democratic Senator Ron Wyden are proposing a new attempt to simplify the tax code. For the average Jane and Joe on the street, it will mean a briefer and clearer one-page tax return form. Our present six tax brackets would be reduced to three—15 percent, 25 percent, and 35 percent. And the corporate tax rate would drop from 35 percent to 24 percent.

It won’t pass, of course, because it eliminates a bunch of lucrative tax breaks for corporations (to say nothing of putting an entire cohort of tax accountants out of work). But at least it’s an effort to make a step in the right direction.

That so many ordinary Americans have to hire a tax accountant to figure out their taxes—often paying more for tax preparation than is owed on taxes!—is just outrageous. This year I paid my tax lawyer $460 to prepare the tax return for the S-corporation, which owed no taxes at all. I paid a like amount to discover that I owed the feds $770 in federal taxes and to extract a $1,000 refund from the state. I have to do that because the absurdly complicated tax rules are utterly incomprehensible to me. There’s no way to understand them, because they make no sense and because they’re couched in cryptic language—only an expert can figure out what they mean and how to apply them, and even the experts regularly make mistakes.

What’s refreshing is to see a “Bipartisan Tax Fairness and Simplification Act.” It’s long past time Republicans and Democrats of good will set aside the pig-headed partisanship and started to work together on the things that matter to the American people.

If people of good will do not step forward to overcome the corrosive divisiveness this country has seen, we will, I believe, be at risk of civil war within another generation—possibly sooner. When political leaders descend into demagoguery and talk about putting those who don’t agree with them “in the crosshairs” so that their followers start to rage about doing violence to elected officials, even the President of the United States, it’s inevitable that violence will follow.

On both sides, the leadership of this country needs to cut off the shackles of partisanship and extremism and come together to lead. Gregg and Wyden’s proposal is at least a tiny sparkle of light from that direction.