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The tax overhaul took important steps in bringing the U.S. tax system in line with the rest of the world and thus increasing U.S. competitiveness, but didn’t make it more permanent and less complicated, a former U.S. Treasury official said.
“Over the years, there have been complaints that we have many parts of the U.S. tax code that expire, so one of the hopes of a tax bill would be not to include items that expire,” said Eric Solomon, co-director of national tax at Ernst & Young LLP in Washington and former assistant secretary of tax policy at the U.S. Treasury Department.
But many provisions, particularly individual provisions, will expire at the end of 2025, said Solomon, who is also chair-elect of the American Bar Association Section of Taxation.
See interview here: https://www.bna.com/tax-code-needs-m57982088838/
“An important part of any tax system is you want to have a stable tax system, so taxpayers can plan going forward, so they know what the rules are going to be. You can make decisions based on what you think the rule is going to be three or four or five years out,” Solomon said, speaking Feb. 9 at the ABA tax section’s meeting in San Diego.
In a prepared statement on his own nomination to become Treasury assistant secretary in 2006, Solomon cited the U.S. tax code’s complexity as one of its greatest problems. Tax reform hasn’t substantially addressed that problem, he told Bloomberg Tax.
While the 2017 tax act’s provisions on business “remain extremely complicated,” Solomon said, the system has become somewhat simpler for individuals, since the doubling of the standard deduction means fewer individuals will itemize.
“But even on the individual side, our tax code is used for many social purposes”—such as tax incentives for charitable contributions and home ownership, Solomon said, making simplification a challenge. “As long as we use the Internal Revenue Code for other purposes, for social purposes, it’s going to be a very hard goal to achieve,” he said.
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