IPI Publication Press Release
IPI Policy Report - # 171
Related Publication Title:
Tax Reform: The Key to Preserving Privacy and Competition in a Global Economy
Released by Dan Mitchell, Ph.D on 04/26/2002
IPI Policy Report - # 171
Related Publication Title:
Tax Reform: The Key to Preserving Privacy and Competition in a Global Economy
Released by Dan Mitchell, Ph.D on 04/26/2002
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Press Release (04/26/2002)
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IRS Biggest Violator of Financial Privacy
Fundamental Tax Reform Would Eliminate Government Privacy Invasions
For IMMEDIATE RELEASE: Friday, April 26, 2002
Contact: Misty Woodruff, 972-874-5139 or misty@ipi.org
Dallas, TX – Most people filed their income taxes last week, and in the process were reminded just how intrusive U.S. tax policy has become. The Internal Revenue Service has practically unfettered access to Americans’ personal and financial data.
Tax reform is the key to fixing this financial privacy problem, according to a new Institute for Policy Innovation (IPI) study by Daniel Mitchell, McKenna Senior Fellow in Political Economy at the Heritage Foundation.
The study, “Tax Reform: The Key to Preserving Privacy and Competition in a Global Economy,” is one of the fifteen studies in IPI’s “Roadmap to Tax Reform” series.
“The bias in our tax system against income that is saved and invested causes a loss of financial privacy,” said Mitchell. “The IRS – because of pervasive double-taxation of capital income – needs to know all the gory details of our financial dealings.”
Mitchell points out several taxes that create this need-to-know imperative. Among them are:
· Taxes on interest income. The government must know all the details about a taxpayer’s bank accounts and bond holdings in order to track – and tax – interest income.
· Taxes on dividends. The government must know any and all stocks an individual owns in order to track – and tax – dividend income generated from these stocks.
· Estate taxes. The government must receive a complete report on all assets owned by a deceased taxpayer in order to levy the “death” tax.
· Capital gains taxes. The government must when an asset is bought, the purchase price, how long it is owned, when it is sold, and how much the asset is sold for – all in order to collect capital gains taxes.
“Americans value financial privacy, yet our internal revenue code requires government to know intimate details about our personal finances. That’s the bad news. The good news is that fundamental tax reform would restore financial privacy since savings and investment income no longer would be double-taxed. Congress should act now to replace our current intrusive tax structure with a simpler, less-invasive tax code. It is the only way to truly redress this invasion of privacy,” said Mitchell.
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