Reuters: Bush's "U.S. tax overhaul faces political obstacles" (IMF Study)

[Bush_Eats_Beef]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-07-29T002902Z_01_N28722429_RTRIDST_0_ECONOMY-TAXES-IMF.XML

WASHINGTON, July 28 (Reuters) - U.S. tax overhaul ideas face steep political and practical obstacles despite widespread dissatisfaction with the existing system, an International Monetary Fund paper published on Thursday said. An advisory panel President George W. Bush named in January to study ways of revamping the tax system is due to propose avenues to make the current code simpler and fairer by Sept. 30.

The panel has not expressed any preferences, other than favoring elimination of the alternative minimum tax, a provision aimed at ensuring high-income taxpayers claiming multiple deductions pay some tax but that is now ensnaring more and more middle-tier earners.

However, the commission has considered a range of proposals that meet the objectives of simplicity and equity while not raising or lowering revenue to the government. Bush has said he hopes a debate this fall will lead to changes by the end of the year.

A national retail sales tax that replaces the current tax on income could be more efficient because it would apply to services, catalogue and e-commerce sales. However, it would likely fall harder on the less well-off, the paper said. Eliminating income taxes except for high earners but adding a value-added tax -- a sales tax on goods and services -- would mean that perhaps 100 million people would no longer have to file an income tax return. It would also have the benefit of significantly lowering taxation of capital income and broadening the tax base, the paper said. But it would be a major political challenge to muster support for a federal sales tax, since states have long been able to collect sales taxes, Delsgaard wrote.

http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=132

ON EDIT: Link to the IMF Paper: http://www.imf.org/external/pubs/ft/wp/2005/wp05138.pdf

[Mountainman]

1. I got hit with the alternative minimum tax last year.

I didn't see it coming. I never made enough money for that to happen but last year I did. Now I owe about $5,000 in state and fed taxes. Even though I made more money last year I did not get it because I owe it to the government. The tax code is not fair to people like me because I have no kids and both wife and I work. I pay more percentage wise then people who earn a lot more and a lot less than me.

Just once I would like to see tax relief for people like me. It will never happen.

Personally I don't get the idea that you should have a tax break because you have kids. Flame away!