Treasury Official: Tax Overhaul May Not Be Drastic

[Rose Siding]

..."There is a lot of work left to do, a lot of decisions yet to be made. We are early in the process yet," Greg Jenner, acting assistant secretary for tax policy at the Treasury Department, told a group of business leaders.

Jenner said White House calls for a simpler tax code that encourages savings do not necessarily mean the U.S. income tax will be jettisoned and replaced by a consumption or sales tax.

"Many people see the words 'fundamental tax reform' as necessarily including that we are going to move from the current hybrid system to a different type of taxes completely. That is not necessarily the case at all," he told a tax policy conference hosted by PricewaterhouseCoopers.
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"The tax code is perceived as unfair in part because it is so complicated," he said, noting that many Americans feel they are being taken advantage of by those who manipulate the code to reduce their tax bills.

"A growing and alarming number of taxpayers consider themselves to be either chumps or cheats," Jenner said. "That will eventually lead to a complete erosion of our tax system if we don't do something to stop it."

Jenner also identified problem areas in the current tax code that he said caused economic distortions.

"We overtax savings. We double-tax corporate profits. We have unequal treatment of debt and equity," he said. "All of these things lead to the misallocation of resources in the economy."

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