The federal tax code is replete with special deductions and credits, exemptions and exclusions, deferrals and other preferred treatment for particular industries, groups or interests. Tax avoidance and abuse are inevitable byproducts. If you give money away I will take it, but good business people don't do things because of inducements. Indeed, both as a former IRS Commissioner and as a practicing lawyer, I have found most businessmen's attitude on tax incentives entirely in line with that of Mr. O'Neill. Beyond this, we continue to see excessive manipulation of the tax laws to promote discrete social or economic objectives.
Many taxpayers feel left out, discriminated against and abused.
With major tax reductions before us, a unique opportunity presents itself to sweepingly simplify tax reporting, ease tax administration and restore taxpayer confidence in the entire system. Focus on tax return simplification, eliminating as many complexities as possible within reasonable revenue costs. Eliminate the bulk of special preferences, broadening the tax base significantly. Tax capital gains in the same manner as ordinary income. Lower all graduated rates across the board.