Tax code reform: Reality or Romanticism?

Guest blogger: Erin P. Hardwick, CAE, 

SCACPA Executive Director

Restructuring our tax code is a popular concept these days –both at the state and the federal level.   But in this economy and this political season, it might also be next to impossible.

At the state level, the legislature appointed a commission in 2009, the Tax Realignment Commission, to study the state’s tax code and make recommendations for serious reform. The TRAC, as it’s commonly called, has met regularly for some 15 months under the leadership of former SC DOR Director Burnie Maybank.  Their final report is due next month and is expected to recommend, among other things, the elimination of many sales tax exemptions while increasing the sales tax at a commiserate level.

The problem today might be the political environment; it’s so noxious that there likely will be little, if any, bipartisan support for any tax reform agenda.

“There is no solution out there right now that anyone would call politically feasible,” William Gale of the Tax Policy Center told Scott Horsley in an interview on NPR called Tax Code Overhaul As Tough As Doing Your 1040.   “That’s not a criticism of the solutions. That’s a criticism of the mind-set of the public and the politicians.”

And yet the push for reform marches on. In a white paper titled Tax Reform Alternatives for the 21st Century, the AICPA says any meaningful tax reform must take into account the following issues:

  • The financial impact that the coming wave of baby boomer retirements will have on our economy. 
  •  The expiration of the 2001 and 2003 Bush tax cuts.
  • The increasingly unfair impact of the AMT on America’s middle class. 
  •  The recession’s negative impact on federal tax revenue.

Learn more  There will be plenty of information on the latest tax-related issues at our upcoming tax conferences and seminars. 

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About scacpa

The South Carolina Association of CPAs is a professional organization that provides support to all CPAs – whether in public practice, industry, government or education - with lifelong learning opportunities necessary for their success, the promotion of high ethical standards and legislative advocacy for both the public good and for the profession.
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