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Why Are US Tax Laws So Complicated?

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If used for raising revenue alone, the US tax system would doubtless be a much simpler affair. However, as the system needs to be fair, efficient and enforceable, and has been used by Congress to influence many aspects of political life and for delivering benefits to groups and industries for many years now, it remains complicated, and in fact, becomes more complex every year. – PowerPoint PPT presentation

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Title: Why Are US Tax Laws So Complicated?


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Why Are US Tax Laws So Complicated?
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  • If used for raising revenue alone, the US tax
    system would doubtless be a much simpler affair.
    However, as the system needs to be fair,
    efficient and enforceable, and has been used by
    Congress to influence many aspects of political
    life and for delivering benefits to groups and
    industries for many years now, it remains
    complicated, and in fact, becomes more complex
    every year.
  • If our taxes werent so complicated, it would
    simply mean that they wouldnt be fair for every
    US citizen, and if that is one of the primary
    goals of taxation, then it wont be set to change
    anytime soon. For taxes to be fair to those whom
    they apply to, they need to account for the
    differences between incomes and needs of
    individuals, families and businesses, and this is
    itself, complex.

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  • What are the goals of an efficient and fair tax
    system?
  • It would be foolish for us to say that taxes
    shouldnt be fair. We are all tax payers, and so
    of course we want our own, individual taxes to be
    assigned fairly. They should be conducive to the
    state of the economy, be easy to enforce and
    simple to understand. They should account for an
    individuals characteristics, such as whether
    they are married and have children, as well as
    how much they earn compared to the cost of their
    expenditures, and everything should be carefully
    reported and documented. Yet despite agreeing
    upon this, we remain undecided as to exactly how
    important each of these factors should be.
    Resulting from this, policies regarding tax rules
    and regulations often come to represent many

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  • competing goals, and keeping things simple, is
    simply not possible.
  • The politics behind the tax system
  • There are always going to be politicians who
    strongly support the subsidising of taxes for
    certain groups of people or for certain
    activities, and these serve only to complicate
    the system further by creating and upholding many
    distinctions among tax payers and uses of income.
    Pressure from activists campaigning for taxes to
    remain the same, has seen many Congress members
    sign a pledge to do exactly that, meaning that
    lowering taxes for some taxpayers, only
    complicates the system further. If any changes
    are then made to the tax system which results in
    them

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  • being raised in the process of simplification,
    then they must be offset with another change that
    lowers them back again. Thats about as
    complicated as things can get, believe me!
  • Other goals that complicate US tax laws
  • To deter people from trying to avoid paying their
    taxes, there does have to be an element of
    complexity. While taxpayers have every right to
    try and lower their taxes by any legal means, in
    doing so, certain questions are raised regarding
    whether some activities or outgoings qualify for
    tax-preferred status. Limiting tax avoidance is
    something that The Treasury Department have
    responded to with a

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  • set of new rules and laws, but of course some
    taxpayers have found ways to dodge these, and the
    never-ending cycle of avoidance and conflict
    continues unabated.
  • The landmark Tax Reform Act of 1986 was an
    incredible accomplishment, in that it sacrificed
    efforts to simplify matters, just to meet a goal
    of revenue neutrality, something that sparked
    many complex phaseouts and hidden taxes to meet
    federal and state targets.
  • So, it seems that our taxes arent likely to get
    any less complicatedin the near future, and if
    understanding them all is proving too much for
    you, why not call on the services of a
    professional company who can guide you through
    the US tax systems murky waters.

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  • At Heyer Associates, we proactively assist our
    individual and small business clients in meeting
    their goals. Our key area of focus is ensuring
    that our clients remain compliant with federal
    and state tax laws by providing them with high
    quality accounting and tax preparation service
    Coral Gables. If you are looking for tax
    preparation service in Miami, Heyer Associates
    would be a right option.
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