Possibly the best outcome of the budget and debt debate may be a simplification of the tax code.  This creates a benefit few have thoroughly considered.

The amount of time and expense that is squandered by business in order to comply and maneuver the tax code is woefully underestimated.  Every action is weighed by tax considerations. The amount of time and money spent with accountants and lawyers on tax related issues is a huge expense that could be much more wisely spent on innovation and growth.

Government tries to social engineer through targeted deductions and credit,  but usually just creates complications that are costly.  Much of the lobbying is transacted to achieve special tax credits and benefits for special interests.  Bad tax policy is tinkered with rather than eliminated, which only makes it more complex and expensive.

Simplifying the tax code would stimulate the economy as much as a tax cut. It reduces a business expense without reducing revenue to the government.  The business savings increases taxable income but it is partially offset by the decline in income for those who make a living helping others comply.  But allowing businesses to spend their time and mental space on more productive activity will generate a net gain in the long run.

We could lower tax rates and eliminate deductions and if we add tax code simplification it will generate more revenue to the government without even considering the economic growth that supply siders (like me) point out are often the result of tax reductions.  Simplification should also include consistency.  Just the rate of change in the tax laws make it impossible to do any productive long term planning.

It is possible to get the increased revenues the administration wants and the tax cuts that will help grow the economy.

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