Beginning of the Simplification of the Tax Code

Last updated on March 5, 2014

The initiation of changes in the tax code has begun with The House of Ways and Means Committee presenting their blueprint before Congress. The blueprint proposes to make the tax code simpler and fairer by providing a generous standard deduction so that 95% of taxpayers will no longer be required to itemize their deductions. It also proposes reducing the size of the tax code by 25%.

The changes suggested in the blueprint are aimed at making the economy stronger by achieving $3.4 trillion in additional economic growth, creating 1.8 million new jobs and adding $1,300 per year to the pockets of the middle-class American families. The proposal also recommends reducing the number of tax brackets from seven to two.

The Tax Reform Act of 2014 by the House of Ways and Means is the first step towards the complete overhaul of the U.S. tax code. It is an important step that will initiate a debate on what needs to be added and removed from the tax code to make it simpler yet more effective.

The tax code that today stands at 70,000 pages began as a 26,000 page long tax code in 1986. Even though there is clearly a need to simplify the tax code, the overhauling itself is a complex and difficult process. With the first proposal of suggested changes, the debate about the tax code has finally started.