April 25, 2007

Wyden Calls Administration Plan to Abandon Tax Reform "Bad Judgment"

Washington, D.C. - U.S. Senator Ron Wyden, a member of the Senate Finance Committee, today said the Bush Administration was turning its back on millions of American taxpayers just one day after Tax Day in announcing it was abandoning much-needed reform of the nation's confusing and special-interest heavy tax code.

News of the Administration's decision to walk away from tax reform came during today's Senate Finance Committee hearing at which U.S. Treasury Secretary Henry Paulson - responding to questions from Wyden - stated, "There isn't a major tax reform proposal being put forward right now, and I don't see that on the dockets in the near future," according to Reuters.

"If you loved filing your taxes yesterday, you'll love the next two years of the same old bureaucratic water torture," Wyden said. "Failing to clean up and simplify the tax code is just bad judgment on the Administration's part. President Bush has made it very clear in the past that tax reform was one of his priorities. Now he is bowing down to special interests rather than protecting American taxpayers. That's very bad news for all of us."

On Monday, Wyden and U.S. Representative Rahm Emanuel (D-IL) introduced comprehensive tax reform legislation that contains major tax relief for America's middle class by making the 1.4-million word U.S. income tax code simpler, flatter and fairer.

Wyden and Emanuel's bill, the "Fair Flat Tax Act of 2007," allows every taxpayer to file taxes on a simplified, one-page 1040 form, collapses individual tax brackets from the current six down to three and sets one, flat corporate rate.

The plan triples the standard deduction, providing tax relief to most Americans and saving countless hours in tax preparation for most people who will no longer need to itemize their deductions. It gets rid of numerous special interest loopholes that are exploited by the fortunate few at the expense of the many. It also ends the disparate treatment of work and wealth under the current tax code by getting rid of the preference for capital gains and dividends over wage and salary income.

Wyden said simplifying the code has other benefits: it will be harder for people to cheat the system and easier for the Internal Revenue Service (IRS) to catch those that do. Currently, there is a tax gap between taxes owed and collected of over $300 billion per year. The Fair Flat Tax Act can make a significant dent in that, raising revenue from a source that won't increase taxes.