Ways & Means holds tax-policy orientation; JFO and counsel set six principles for review

At a January 10 committee orientation, legislative counsel Kirby Keaton and Joint Fiscal Office associate fiscal officer Chris Roop briefed the Ways & Means Committee on fundamental tax mechanics and a set of principles the committee should use to evaluate tax proposals.

Keaton opened with a plain formula for thinking about taxes: “tax base times tax rate equals tax liability,” and walked members through how the law defines a tax base, how exemptions and deductions shrink that base, and how credits reduce tax liability. He warned that partial or narrowly tailored exemptions can add compliance burdens: complex exemptions have in the past produced costly audits and taxpayer confusion, he said.

Roop, who oversees the JFO revenue team, presented six widely cited principles to guide lawmakers: sustainability and reliability; fairness; simplicity; economic competitiveness; tax neutrality; and…