IRS Scandal and Tax Reform

Tax reform has been a topic of political conversation for years.  It had appeared that law makers may make headway this year and then the IRS scandal happened.  With reports of the IRS targeting specific conservative groups for audits and additional scrutiny business owners, investors, and conservatives clearly have something to worry about.  Rep. Dave Camp (R-Mich) has complained about the “arrogance” within the agency and is unhappy with the lack of answers they received during the recent investigation.

Chairman of the House Democratic Caucus, Rep. Xavier Becerra (California) said that the tax code is part of the problem that led to the IRS targeting conservative groups.  He said on Meet the Press, “The reason we have this problem is because we have a tax code that allows groups to use their political operations within the tax code under the guise as a charity, to use undisclosed millions of dollars to do political campaigns.”

Congressional Representatives are using the recent IRS tax scandal to encourage people to pursue further tax reform and deal with the IRS black hole once and for all.  Camp said, “A lot of people feel the tax code is broken. It’s not fair, it’s inefficient, it’s so complex. The average family should be able to fill out their own tax forms and file them. They can’t now. It takes the average American 13 hours to comply with the code.  I think we need a fairer, flatter, more efficient tax code.”

Some people are even calling for elimination of the agency all together.  Forbes columnist John Tamney said, “The problem is not the redundancy that is the ‘politicized IRS, Rather the problem is that the IRS exists to begin with. It’s time that we abolish our tax authority with a view toward re-asserting our individual liberty.”  He goes on to say that the tax authority basically holds citizens hostage as they give over a portion of their pay check every month only to live in fear of completing their taxes incorrectly and ending up in trouble with the law.  Tamney advocates that the government “must scrap the income tax code altogether and institute a national sales tax,” which “would mean we no longer need to act as subjects cowering in fear of a tax authority.”

Others argue that a flat tax is the solution to our nations tax troubles.  By using a flat tax the complicated IRS code would no longer be relevant and citizens would at least be able to understand what their tax liability is.

The IRS scandal is at best causing many citizens to look at the reality of government corruption.  Investors, business owners, and citizens should continue to pay attention to the tax scandal and any changes made to tax regulations.  Staying up to date is an important component of protecting your investments and keeping more of your money in your pocket.

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