Resolution on Reforming the US and NY Tax Systems; Part 1
WHEREAS the tax codes of both the United States and New York are exceedingly complicated, difficult to understand, and subject to significant avoidance by the wealthy and well-connected;
WHEREAS the current tax system contributes to the growing disparity of both wealth and income due to tax preferences and rates that disproportionately benefit the wealthy;
WHEREAS taxes should be simple, fair, progressive, and broad-based*;
THEREFORE, be it resolved by the Four Freedoms Democratic Club that:
New York State should commission an independent study to evaluate the impact of New York’s tax system on different income groups and racial/ethnic groups. The legislature should act to reduce disparities in the State tax system and increase progressiveness.
New York State and the Federal government should allow taxpayers to opt-in to a government-run automated tax filing system, as has been done successfully in several other countries. Such a system would benefit millions of low-income families who find it difficult to claim the Earned Income Tax Credit, Child Tax Credit and other tax credits while sparing many taxpayers the long, costly, and tedious task of preparing annual tax returns.
Congress should maintain the funding needed to expand the budget and authority of the IRS with a mandate and improved capability to examine complicated tax returns and tax schemes under which the wealthy often minimize or eliminate taxation.1
* By “broad based,” we mean that everyone pays taxes; that special preference is rarely given to certain types of income; and that all income should be taxed equivalently. Some of the actions that will lead to this goal are included in this resolution. We also note that, by moving towards a more broadly based tax system, it is possible to reduce the tax rate, minimizing the financial reward for tax avoidance.