What does tax reform typically involve?

Tax reform typically involves modifications aimed at simplifying the tax code. This can include a variety of changes designed to make the tax system more straightforward and user-friendly for taxpayers. Simplification may encompass reducing the number of deductions and credits, consolidating tax brackets, or streamlining reporting requirements, all of which can lead to increased compliance and enhance overall efficiency in tax administration.

The correct answer reflects the common objectives of tax reform, which often seeks to lessen complexity and make tax compliance less burdensome for individuals and businesses. By focusing on simplification, lawmakers aim to create a system that is easier to understand and navigate, which can ultimately improve taxpayer engagement and reduce the likelihood of errors.

In contrast, options focusing solely on increasing tax rates, eliminating all deductions and credits, or standardizing tax law across states do not encompass the typical essence or intent of comprehensive tax reform. Increasing rates does not simplify; complete elimination of deductions may create inequities and is not a common comprehensive reform strategy; and standardization across states does not align with the nature of federal tax reform, as tax law can often reflect localized fiscal needs and priorities.