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A Simpler Tax Code

August 23, 2017

We’ve heard a lot of talk about tax reform over the last few weeks as Washington shifts its focus to this important legislative priority.

It’s true – the tax code is too complex and too difficult to navigate for many Americans. That’s why H&R Block supports tax reform. Here are some of the opportunities we see to simplify the code.

  • Streamline. We need to make it simpler for consumers to navigate the tax code. Reducing the number of tax brackets from seven to three is a first step to limiting complexity and lowering administrative burden. We should also look at eliminating the Alternative Minimum Tax (AMT). Today, the burden of the AMT requires taxpayers to calculate their taxes twice; in the standard method and the alternate method. Unfortunately, because of the wide net cast by the AMT, despite recently indexing for inflation, many in the middle class still get stuck with the burdens. Other ways to streamline the code include consolidating the five different definitions of a “child,” and reforming the so-called “kiddie tax.” Originally intended to keep wealthy parents from avoiding tax by transferring stocks and other securities to children, the increased age range means that now, middle-income families and college students are sometimes affected.
  • Decrease burdens on small businesses. Small businesses, like our almost 1,600 franchisees, are overburdened by complex rules and administrative costs that hamper growth and innovation. This problem is only exacerbated when many small businesses don’t have the time or money to hire outside help to navigate these rules within the tax code.
  • Lower the corporate tax rate. It’s no surprise that the business tax rate has contributed to the high number of companies that go overseas to decrease their tax burdens. Congress last addressed significant changes to the corporate tax structure 30 years ago and it’s time to revisit this topic. Lowering the business tax rate could be significant for many U.S.-based companies, including ours.

H&R Block has filed over 750 million tax returns in the 63 years we’ve been in business.  We have seen taxpayers need help navigating the tax code in simpler times through now. We believe all taxpayers should have equal access to the right start, the right support, and have the right safeguards in place to help them before, during and after tax season.  Whatever reforms are passed, we will be here to administer them honestly and fairly and help our clients.

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