The Big Fix: Revamping the American tax code

Benjamin Franklin once wrote, “in this world nothing can be said to be certain, except death and taxes.”

True, but the devil is in the details. And in the U.S. there are a lot of details.

The American tax code is thousands of pages long and filled with ever-changing rules for deductions, credits, exceptions, subsidies, and much more. It’s been estimated that we spend $146 billion and 11.6 billion hours each year just completing the paperwork.And then there’s the essential questions of who pays and how much?

So in the latest edition of our monthly “Big Fix” series — where we explore solutions to some of America’s toughest problems — we’re trying to solve for the tax code. 

For some, that means raising taxes on the wealthy. With income inequality and budget deficits continuing to grow, many progressives see higher rates on the richest Americans as a way to level the playing field. A “millionaire’s tax” recently passed in Washington State, and a “billionaire’s tax” is up for a vote in California this fall.

Critics of these measures argue that high earners and corporations already pay the lion’s share of federal income taxes, and that increasing levies would stifle economic growth and drive businesses, along with their tax revenue, elsewhere.

Here, we’re bringing together three experts to present their best ideas for overhauling the tax system. We’ll talk about who benefits from the complexity, and what to do about loopholes, evasion, capital gains, child credits, property taxes, and much more.

Guests:

• Amy Hanauer, executive director of Institute on Taxation and Economic Policy
• Adam Michel, director of tax policy studies at the Cato Institute
• Daniel Garrett, assistant professor of finance at The Wharton School of the University of Pennsylvania