Tax reform

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Tax reform is the process of changing the way taxes are collected or managed by the government.

Tax reformers have different goals. Some seek to reduce the level of taxation of all people by the government. Some seek to make the tax system more/less progressive in its effect. Some seek to simplify the tax system. Some may be trying to make the tax system more understandable, or more accountable. Many organizations have been set up to reform tax systems worldwide, often with the intent to reform Income taxes or Value Added Taxes into something considered more economically liberal. Other propose tax systems that attempt to deal with externalities. Georgism claims that various forms of land tax can both deal with externalities and improve productivity.

[edit] United States

"'Revenue Reform' Train Stopped by 'Vested Interests,' 'Local Issues,' 'Trusts,' and other poles" — Political cartoon from 1880–1900 commenting on tax reform.

There have been many movements in the United States to reform the collection and management of taxes.

As the United States was still being formed, the Whiskey Rebellion of 1794 may be considered to be the first effort for tax reform in the United States. President George Washington led 12,950 troops to western Pennsylvania to put down the rebellion.

During the late 19th century American economist, Henry George, started a global movement for tax reform whose aim was the abolition of all forms of taxation other than the Single Tax on land value. The effects of the movement on taxation policy, although diminished can still be seen in many parts of the world including Australia, New Zealand, Hong Kong, Taiwan and Singapore. Efforts to promote this form of tax reform in the United States continue under the aegis of organizations such as The Henry George Foundation of America.

The President's Advisory Panel for Federal Tax Reform's major push was for the removal of the Alternative Minimum Tax. Several organizations are working for tax reform in the United States including Americans for Tax Reform, Americans For Fair Taxation and Americans for Responsible Taxes. Various proposals have been put forth for tax simplification in the United States including the FairTax and various Flat tax plans; however, neither of these address the burden most tax systems lay on the poor.

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