The Obama Administration yesterday backed down from its plan to tax the earnings on 529 savings accounts, a kind of saving account for higher education under section 529 of the tax code. At Bloomberg, Richard Rubin and...
- Responses to Questions from Senator Olympia Snowe on the ...
Responses to Questions from Senator Olympia Snowe on the Effect of Federal Tax Policy on the States
These questions related to this testimony to the U.S. Senate Finance Committee. See related answers to questions from Senator Baucus, Senator Hatch, and Senator Enzi.
While it might be routine for CPAs to find a way to comply with the overlapping and inconsistent requirements for filing state income tax returns for their own work in multiple states, do you think it is feasible to expect people who are not CPAs to follow these rules?
It’s neither feasible nor desirable. Tax complexity imposes an enormous cost on our economy, because dollars going to pay lawyers and accountants to sort through definitions and worksheets and differing standards are dollars that are not used to invest in productive business activity and job creation that advances our standard of living.
Advances in transportation and technology mean we’re going to see more and more people buying and selling things in multiple states, earning income in multiple states, and setting up businesses in multiple states. If we don’t want all these people wasting their time divvying up tax dollars through a bewildering array of contradictory and opaque rules (or wasting their money paying someone to do it for them), tax simplification is necessary.
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