Plan for Complete Overhaul of Federal Tax Code Gains Support in Congress

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Heartland:

upport is growing in Congress for a plan to sunset the current U.S. tax code and rewrite the country’s federal tax laws from scratch.

 

In May, U.S. Reps. Keith Rothfus (R-PA) and Jason Smith (R-MO) joined 134 other members of Congress from both political parties in cosponsoring House Resolution 27, a bill proposed by Rep. Bob Goodlatte (R-VA) to dissolve the federal tax code—except for payroll taxes—forcing lawmakers to pass a replacement tax.

 

H.R. 27, the Tax Code Termination Act, would repeal the entire U.S. tax code effective January 1, 2020, and it calls for any replacement tax code to feature a lower and fairer tax system.

 

No More ‘Nibbling’

 

Collin Hanna, president of Let Freedom Ring—a nonprofit, nonpartisan public policy organization—says the federal tax code has become too complex to be reformed by tweaks and adjustments.

 

“Nibbling around the edges does not achieve substantial and fundamental tax reform when you’ve got such an enormous body to nibble at,” Hanna said. “Something that long and complex is inherently unfair because it is inherently inscrutable. Nobody can really understand it.”

 

Starting Over

 

Hanna says lawmakers won’t make fundamental changes in the tax code unless forced to do so.

 

“The way to start from a blank slate is to end the current code at a specific date that is far enough in the future not to roil the financial markets and yet close enough to the present to spur some kind of action,” Hanna said.