It must be meaningful when even the Internal Revenue Service's national taxpayer advocate says the tax code is too complicated. She offers six core principles to guide reform efforts:
First, the tax system should not be so complex as to create traps for the unwary. Second, the tax laws should be simple enough so that most taxpayers can prepare their own returns and compute their tax liabilities on a single form, and simple enough so that IRS telephone assistors can accurately answer taxpayers' questions. Third, the tax laws should anticipate the largest areas of noncompliance and minimize the opportunities for such noncompliance. Fourth, the tax laws should provide some choices, but not too many, since choices are confusing and can lead to taxpayer error. Fifth, where the tax laws provide for refundable credits, they should be designed in a way that is minimally burdensome both for the taxpayers claiming the credits and for the IRS in administering them. And last, the tax system should incorporate a periodic review of the tax code -- a sanity check to guard against complexity creep.
The best and most effective reform of all would be just to go to a flat tax. The form could fit on a post card, and filers could do their own taxes in about 15 minutes. But that's probably too simple for someone who gets her paycheck from the IRS.
