During a visit to Indiana on Wednesday, President Donald Trump discussed changes he wants for the income tax system, but will they help or is it too complicated?
The federal tax code is hundreds of thousands of pages long, even after President Ronald Reagan simplified it. There continue to be additions to the code to support certain types of behavior such as mortgage and child care deductions for families or health insurance or travel deductions for companies.
Deductions can only help so much.
The U.S. has one of the largest corporate tax rates in the world -- as much as 35 percent while the global average is more like 25 percent. There is an appeal to moving businesses abroad, which is precisely what President Trump wants to end.
President Trump's plan doubles the standard deduction from $12,000 to $24,000 for married couples, That is significant because 70 percent of taxpayers do not itemize and most of them cannot afford to hire an accountant nor do they have the time to track their deductible acts each year.
Income tax preparation is big business. The federal government knows what you earn anyway so why not just send taxpayers a pre-filled form to sign off on? Congress actually approved that in 2008, a system for people to file simply, but H&R Block and TurboTax spent millions of dollars on lobbyists to fight it, citing that it would cause them to lose customers.
The bottom line is that analysts believe his plan will mean a lot of lower income families will be paying fewer if any federal taxes at all.