Congress should strip every tax deduction and exclusion from the federal tax code (including, for example, employer-provided health insurance, pension payments and possibly life insurance and annuity cash values) and then re-institute only those that lawmakers find justifiable.
This is the advice of National Taxpayer Advocate Nina Olsen, who as head of the government's Taxpayer Advocate Service offered her recommendations to Congress last week.
No tax benefit should be returned to the tax code, Olson said, unless Congress concludes that “on balance, the public policy benefit of providing that benefit ... outweighs the complexity it imposes on taxpayers.”
This, she said, is a “zero-based budgeting approach to comprehensive tax reform.” She said if all existing exclusions, exemptions, deductions and credits were eliminated, individual tax rates could be cut by 44 percent and the code would still collect the same amount of federal revenue as is collected under current tax rules.
Olsen's is just one of many voices Congress will hear as tax-reform efforts begin in earnest this year. NAIFA is committed to ensuring that the voice of the agent-advisor community and their clients is among the loudest and clearest.
NAIFA members can explain to Congress like no one else that life insurance, annuities, pensions, employer-provided health insurance and other insurance benefits are crucial to the 75 million middle-American families we serve. Making these products less attractive to consumers or more difficult to obtain is simply bad policy.
That's why it is important for as many agents and advisors as possible to participate in NAIFA’s Congressional Conference April 8-9 in Washington. There is no force like constituents who are experts on how the tax rules impact a person’s decision to carry the protection needed for his or her family or small business. We need you. Your clients need you. YOU need you!
Registration for NAIFA's Congressional Conference is now open.
