There is an "academic debate" going on regarding the House GOP's plan to reform the tax code, says tax attorney Rob Wood, of Wood, LLP in San Francisco, California. While Wood believes most tax codes are hard to reform, he believes this one "doesn't stand a chance." Some people are calling it tax simplification, which Wood finds "a little ridiculous," given the 1,000 pages in the bill.
Some people on both the right and left are upset over the bill. The liberals and democrats say the bill is perceived as not taxing the wealthy heavily enough and conversely, a lot of people on the wealthy side in certain industries, particularly hedge funds and private equity people, are very upset because the bill would target carried interest, which would allow partners and hedge equity funds to get capital gain treatment instead of ordinary income, Wood explains.
Someone in the tax world coined the phrase "stillborn," when referring to the tax code reform, says Wood, which he finds very apt. He does say that some tax reform is needed but at some point, you've got to wonder what's all the effort worth. "I like simplicity and simple is good sometimes," Wood says.
Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.