Sleeping with the Enemy on Taxes

American Progress published this on its website.

SIMPLICITY - REDUCE THE NUMBER OF TAX BRACKETS: President Bush has added over 10,000 pages to the federal tax code. The American Progress plan would make the system far simpler. The number of tax brackets would be reduced from six to just three – 15 percent (for income up to $), 25 percent (for income between $25K and $120K) and 39.6 percent (for income over 120K).

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The delight in showing the Bush administration to be liars, hypocrites and incompetents is certainly wholesome. However, BrooklynDodger fears that American Progress has been sleeping with the enemy on this one. This makes seeking exemptions more important, not less important. The pages of the tax code are mostly about exempting income from taxation. Fewer tax brackets, with bigger ranges in tax rates, increase the problem. As this goes on, the importance of crossing a boundary to a lower bracket increases, and so the incentive to seek every little advantage if it can add up to the big windfall. Looking up the tax in a long table or short table is a trivial effort after coming up with the final number.