The Presidential Panel on Tax Reform proposed a complete overhaul of the Internal Revenue Code. The purpose would be to simplify the tax compliance process while collection the same taxes. Under the panel’s plan, most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax.
The proposal would abolish the Alternative Minimum Tax, a levy originally drafted to prevent wealthy individuals from escaping taxation but increasingly reaching into the middle class forcing them to pay at least 28% tax on their income. They also would eliminate federal deductions and credits for mortgage interest, state and local taxes and education, among others.
There is little chance this reform will be enacted in 2006 because it is an election year for Congress.
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