Tax professionals aren't worried about tax reform getting too radical

The complete Internal Revenue Code is more than 24 megabytes in size and would take up more than 7,500 pages, but several Republican presidential candidates are talking about slashing it to mere sentences.


Herman Cain has become famous for his 9-9-9 plan, a policy with which citizens would pay 9 percent sales tax, 9 percent individual tax and 9 percent business tax.

Individuals at or below poverty level would pay no individual tax, Cain announced last month in a Detroit campaign speech.

Although the idea seems straightforward, using a hatchet on the tangled tax code isn’t likely to be that easy, according to Augusta accountant and politician Jerry Brigham.

“I think it’s going to be easier said than done,” he said.

Sen. Ron Paul wants to eliminate the concept of income tax from the U.S. completely; he would have a 15 percent corporate tax.

Texas Gov. Rick Perry says that he would enact a 20 percent individual flat tax and 20 percent corporate tax.

Perry also said he would eliminate the majority of itemized deductions, streamlining the tax-filing process.

Paul Wade, a partner at Serotta Maddox Evans in Augusta, said that promising to eliminate or highly simplify the code might be too much for candidates to promise.

“The current system is extremely complicated, but even if they tried to simplify things, it’s probably just going to make things more complicated,” Wade said. “It wouldn’t be nearly as simple as it’s being portrayed.”

Brigham said that some simplification is definitely in order. He has been in taxes for more than 20 years.

“It’s getting more and more complicated,” he said. “It’s always been complicated, but now you have to have special software to even know how to fill out a form.”

U.S. legislators aren’t known for their quick action, he said, and that’s what would stop the dramatic tax reform even if one of the Republican candidates were elected president.

“It’s going to be a slow-moving change, not a radical change,” Brigham said. “And it would have to be revenue-neutral somehow, just in order to keep operating the country.”

If Cain’s 9-9-9 plan were to wind up as national policy, or Paul manages to eliminate income tax altogether, Wade and Brigham’s trade could be in danger of becoming obsolete.

That possibility doesn’t have them worried, however.

“It’s not going to happen,” Brigham said. “It just isn’t.”



Fri, 01/19/2018 - 21:23

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