Washington Inaction Could Lead to Tax Increases
(Washington, D.C.) – The 2015 tax season may be complicated by a range of factors – including both the new health care tax penalty, and Washington's failure to come together on a plan for the U.S. tax code. Despite bipartisan interest in pro-growth tax simplification, no action was taken this year. And while Congress was preparing to act on legislation to extend tax breaks that have expired, that process stalled when the White House insisted on including tax increases or spending cuts as in any tax package. As a result, dozens of tax provisions that expired at the end of 2013 are expected to be considered during a "lame duck" session of Congress at the end of the year. This failure to work together leaves individuals and business owners with uncertainty about the current tax code and questioning what to expect when they file their tax returns in April.
Failure by the president and Congress to act in a bipartisan way on taxes may ultimately lead lawmakers to irresponsibly extend all expired provisions without debate, or to allow many to simply expire. This would result in tax increases on teachers, students, commuters, homeowners, and others. These delays may make it difficult for the Internal Revenue Service to update regulations in time for orderly tax filings. This could delay refunds, or even lead to costly errors as the IRS attempts to deal with any changes that may be signed into law.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
"There are few issues in Washington that touch people's lives on a daily basis as directly as the tax code. It goes without saying that sensible tax policy is critical for workers, for families, for small businesses – for our entire economy. In recent years many officials on both sides of the aisle have called for bipartisan tax reform that addresses inequities in the law by lowering rates and closing loopholes. Unfortunately, there's been no real effort to bring people together and get something done for the American people.
The American people shouldn't be victimized by leadership in Washington that would delay and avoid debates rather than address concerns. Millions of people potentially face a fine for failing to purchase insurance as required under the health care law. Now they may face higher taxes and an even more complicated process just because the White House could not build support for tax legislation."