Tax day is upon us, and millions of Americans are scrambling to finish their returns on time by navigating one of the most illogical, unfair, and confusing tax systems in the world—the federal tax code.
Almost 40 years ago, Congress passed the Tax Reform Act of 1986, the last major overhaul of the federal tax code. Signed into law by Republican President Ronald Reagan and championed by Democrats such as Bill Bradley and Richard Gephardt, the enactment of the law was a historical, and by today’s standards, almost impossible bipartisan achievement. It significantly reduced marginal rates with a top rate of 28 percent, removed millions of working poor off the tax rolls, and simplified the tax code by closing a myriad of tax loopholes.
Unfortunately, over time, Presidents and Members of Congress have conspired to undue much of the good that came from the 1986 reform—often under the guise of reform. many of the loopholes that the 1986 reform eliminated have returned, with a few extra ones slipped in for good measure. Since the law’s enactment, tens of thousands of changes have been made resulting in a tax code (including regulations and official guidelines) that is several volumes longer than The Bible and requires almost 75,000 pages.
