Washington, DC -- As the United States approaches "Tax Day" this Wednesday, the Committee for a Responsible Federal Budget (CRFB) urges politicians to begin thinking about comprehensive and fundamental tax reform.

"As people finish up their taxes this week, they understand that the system is in many ways broken," said Marc Goldwein, policy director of CRFB. "The average taxpayer spends over 24 hours and $200 a year preparing his or her taxes; the code is so dense that the instructions for the basic 1040 form alone are 161 pages long."

"Yet the problems with the tax code go well beyond complexity. With record deficits projected out as far as the eye can see, it's pretty clear we aren't raising enough revenue to pay for the policies the Administration and Congress are proposing," Goldwein continued. "Moreover, the tax code is littered with expensive and ineffective tax expenditures, it distorts economic decision making and long-term growth, and it contains a number of major expiring tax provisions that we haven't figured out how to deal with."

Among the expiring provisions is nearly every tax cut signed into law by President Bush in 2001 and 2003, including a decrease in marginal tax rates, an expansion of the child tax credit, a phase-down and eventual phase-out of the estate tax, and cuts to the capital gains and dividends rate. Also expiring is an annual "patch" to the Alternative Minimum Tax (AMT), and a number of other provisions included in the recent stimulus bill such as the Making Work Pay tax credit and the American Opportunity Tax Credit.

"Given our current fiscal picture, we're going to have to think carefully about which of these provisions we want to renew, which we want to reform, and which we should abandon. And to pay for the ones we are keeping, we need to find appropriate spending cuts - or alternative sources of revenue - at least over the long run," said Goldwein. 

CRFB urges policymakers to use the debate over the renewal of expiring tax provisions to make broader changes to the tax code. We believe that it is important for the United States to have a tax system that raises sufficient funds in a fair, simple, and equitable way, while minimizing economic distortion.

For further inquiries, please contact Kate Brown at 202-596-3365 or brown@newamerica.net

The Committee for a Responsible Federal Budget is a bipartisan organization committed to educating policy makers and the public about issues related to fiscal policy. The Committee is located at the New America Foundation. Please visit www.crfb.org.