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No simple answer to the problem of tax reform

The April 16 editorial on tax reform claiming “a simple” way to reform the tax code was disappointing. Taxes are a complex issue that cannot possibly be addressed by the simplistic views expressed. In fact, everyone should immediately run from any politician, cleric, talking head or editor that claims to have “a simple” answer to any complex problem.

The most egregious flaws the tax reform editorial failed to address are: 1. corporate and small-business taxes; 2. taxes for the rich (top 5 percent); and 3. government spending.

This year, more large corporations paid a zero or negative (received a refund that exceeded taxes paid) effective tax rate due to Trump’s “tax reform” than at any time since World War II. Meanwhile, small businesses only received a token similar to average people. Tax reform means starting with a blank slate regarding deductions, loopholes, etc., that large corporations enjoy. And, small business should pay the same effective tax rate as large corporations. More importantly, taxes need to be based on earnings; not income or profit. The same goes for the super-rich.

The purpose of taxes is to pay for government services and programs, which means you can’t have a discussion on tax reform without a discussion on spending. Naturally, this is the most difficult part of the equation since one person’s infrastructure project is another person’s wasteful spending.

In the future, tax reform editorials should stick to general concepts while acknowledging the devil is in the details.

Kevin Bridges

Kahului

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