With Congress starting to begin tax reform, let me offer a couple of my thoughts on ways to 'simplify' taxes:
• "Income is income:” Why should some forms of income be treated differently from others? At one time, there was an argument that a lower rate on investment income would bring in more money to help the stock market, but you can hardly argue now that the stock market is short of capital.
• If "corporations are people, too," then we can simplify by having the same tax rates for "everyone" - why do corporations get special rates?
• There are many who argue for eliminating the estate tax (also known, pejoratively, as the 'death tax') as a simplification. Right now, if I have owned an asset (such as property, investments, or a business) for some years and sell it, I have to pay taxes on the gain in value over the years; but if I die (and its value is less than the $5 million limit), it goes to my heirs with no taxes; and then if they sell it they only pay taxes on the amount it may have increased since my death. In other words, those capital gains are never taxed.
On one hand you could argue that any inheritance is income and should be taxed the same as any other income, but at a minimum, I would argue that if the estate tax were eliminated, then the inheritance should at least be subject to the capital gains taxes.
Dennis J. Ewoldt