I am concerned that the new tax reform legislature will end up being the "tax unfairness act." My concern stems from the fact that the proposed act is essentially trying to accomplish three goals that cannot help but increase the tax burden on white and blue collar workers.
The first goal is to create a law that will be revenue neutral--the government will get the same amount of tax dollars from the American people, only the source will change. The second goal is to reduce and simplify the tax rate structure. As a consequence, the tax rate for those in the upper income brackets will be reduced from 50% to 28% and the very poor will be eliminated from the tax rolls. Since the results of the first two goals are in conflict, the third goal is to find "new sources" of revenue.
In finding new sources of revenue, Congress will eliminate numerous deductions, many of which are beneficial to white and blue collar workers. Congress also decided to tax corporations in a "fairer" way. As many businessmen know, the buck does not stop at the corporate level. To the extent that the cost of goods and services, including the federal income tax, can be shifted to the consumer, corporations will do so. To the extent that the corporations sells essential goods and/or services, the more likely it will be able to increase the price to its consumers.