Congress seeks tax-reform ideas; let’s oblige
“Tax reform” can mean many different things. So, as Congress collects ideas for tax-code changes, it’s important that advocates for working families make clear our chief aim for any reforms: protecting and strengthening the well-being of struggling households.
The U.S. House Ways & Means Committee has established small working groups of its members to zero-in on ideas related to 11 different topics. Anyone interested can use these guidelines in forwarding suggestions to the working groups through email@example.com until April 15, when the Joint Committee on Taxation will begin preparing a report that summarizes the ideas for further Ways & Means consideration.
Over in the U.S. Senate, the Finance Committee is dividing its examination of tax-reform matters among 10 different areas, with committee staff preparing “options papers” on each one over the coming weeks (starting with “Simplifying the Tax System for Families and Businesses”). Staff have said the committee is interested in any ideas that members of the public would like to submit, as well.
NCTC encourages our members and partners to participate in this process, and we plan to submit suggestions to both Congressional committees that reflect the tax-reform principles we outlined last fall: Fundamental fairness, adequacy, and simplicity.
Critics of the tax code’s enormous complexity often call for its simplification. However, some also argue that “simplicity” is served best by reducing in number and size the marginal tax rates applied to the last dollar of income earned by the wealthiest households. Yet that would unfairly put greater tax-liability pressures on low- and moderate-income families, particularly if it’s not balanced with preservation and improvement of refundable tax credits and other measures insulating such households from increases.
We should be helping, not further burdening, families who already struggle for financial security. Plus, we need to strengthen, rather than erode, the adequacy of our revenue system to support important priorities such as education, health care, and human services.
NCTC firmly believes that one of the best ways to pursue the cause of simplicity is better support for the Volunteer Income Tax Assistance (VITA) program, whose well-trained and certified volunteers help more than 1.6 million taxpayers find their way through the tax code’s confusion. Strengthening those services will be a central recommendation of NCTC’s tax-reform recommendations, echoing the goals of our VITA Act legislation.
In addition, NCTC will call for bolstering important tax credits for working families, as well as their tax-time savings opportunities.
Calls for “tax reform” are not uncommon in Washington, and it remains unclear where the Finance and Ways & Means efforts might lead. However, advocates for working families should certainly take advantage of these opportunities to continue mapping-out wise policy directions for willing lawmakers.
By Sean Noble, Director of Public Policy & Research