Taxes: Discussing Complex Issues in Plain English

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As we enter the final weeks leading up to the national election, I have noticed how much media coverage has changed over the years. Substantive issues are reduced to sound bites, most discussions focus on personalities, and allegiances to political parties resemble the loyalty that sports fans have for their teams.

On the plus side, conventional wisdom about growing apathy to the contrary, voter registration and turnout have shown signs of improvement over recent national elections. My hope is that this reflects a stronger commitment on the part of the American public to use their Constitutional right to vote, and thereby have a voice in decisions that affect their lives.

Understanding the issues so we can develop informed voting opinions has never been more difficult than in today’s media environment. Where domestic issues are concerned, George Bush’s and John Kerry’s tax policies differ in important ways that all voters should educate themselves about.

Tax Reform Priorities

What our presidential candidates and their parties say about tax policy is particularly important here in the State of New York because federal and state tax policies are interconnected. According to a recent independent study, the people of New York pay the highest state and local taxes in the country, nearly $131 of every $1,000 of income in 2002.

President Bush recently announced that tax reform is one of his key priorities and that he intends to pursue a bipartisan effort to make the tax code “simpler, fairer, and pro-growth.” Specific proposals include accelerating the 2001 tax cuts to increase the pace of economic recovery and job creation, ending the “double-taxation” of dividends to encourage investment in American businesses, and increasing incentives for small businesses to grow.

On the other side of the aisle, the Kerry campaign platform advocates cutting taxes for companies that create jobs in the United States, and ending tax breaks on income from foreign subsidiaries, which encourage companies to ship jobs overseas. The Democratic platform calls for cutting taxes for 98% of Americans, rolling back the Bush tax cuts for those making more than $200,000, and rebuilding the tax code so it rewards work and creates wealth for more people.

The CPA's Role

CPAs should strive not only to be well informed in this area, but also to be able to explain how our tax system works in simple terms, as well as to express their own opinions logically and clearly. CPAs have the knowledge to interpret political “sound bites” and tell people what the ultimate impact will be on the taxes they pay. Individual CPAs would provide an enormous boost to the public good if they objectively explained in plain English the effects of different tax proposals. They can do that yet for this election. Furthermore, my vision for the future has the NYSSCPA thoroughly analyzing all sides of any state or federal tax reform proposals, and recommending policy directions based on the substance of the issues rather than on the political party or politician proposing them.

Louis Grumet
Publisher, The CPA Journal
Executive Director, NYSSCPA






















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