Tax reform involves enacting legislation to simplify complicated tax codes and adjust rates/rules/regulations with the aim of enhancing fiscal and economic impacts.
Drivers of Reform:
- Increasing competitiveness by lowering business costs and easing compliance burdens
- Addressing inequities where similarly situated taxpayers face inconsistent treatments
- Recalibrating revenues by broadening bases or instituting new revenue streams
Example:
A successful 1986 reform act simplified personal income tax schedules and lowered rates in exchange for eliminating loopholes.
Takeaways:
Reform balances policy goals through compromise, yet temporary provisions and delayed enactment dates obscure true impacts. Public debate weighs replacing complex, inefficient systems against predictable gradual improvements.
