Question

Do you think that frequent changes in the tax laws are good or bad for the economy? What about for taxpayers? What about for tax professionals?

Answer 1

EFFECT ON ECONOMY:-

Both changes in the level of revenues and changes in
the structure of the tax system can influence economic
activity, but not all tax changes have equivalent, or even
positive, effects on long-term growth.
The argument that income tax cuts raise growth is
repeated so often that it is sometimes taken as gospel.
However, theory, evidence, and simulation studies tell
a different and more complicated story. Tax cuts offer
the potential to raise economic growth by improving
incentives to work, save, and invest. But they also
create income effects that reduce the need to engage
in productive economic activity, and they may subsidize
old capital, which provides windfall gains to asset holders
that undermine incentives for new activity. In addition,
tax cuts as a stand-alone policy (that is, not accompanied
by spending cuts) will typically raise the federal budget
deficit. The increase in the deficit will reduce national
saving—and with it, the capital stock owned by Americans
and future national income—and raise interest rates,
which will negatively affect investment. The net effect of
the tax cuts on growth is thus theoretically uncertain and
depends on both the structure of the tax cut itself and
the timing and structure of its financing.
Several empirical studies have attempted to quantify
the various effects noted above in different ways and
used different models, yet mostly come to the same
conclusion: Long- persisting tax cuts financed by higher
deficits are likely to reduce, not increase, national income
in the long term. By contrast, cuts in income tax rates
that are financed by spending cuts can have positive
impacts on growth, according to the simulation models.
In modern United States history, however, major tax cuts
(in 1964, 1981, and 2001/2003) have been accompanied
by increases in federal outlays rather than cutbacks.
The effects of income tax reform—revenue- and
distributionally-neutral base-broadening, rate-reducing
changes—build off of the effects of tax cuts, but are
more complex. The effects of reductions in rates are
the same as above. Broadening the base in a revenue-
neutral manner will eliminate the effect of rate cuts on
budget deficits. It will also reduce the impact of the rate
cuts on effective marginal tax rates and thus reduce
the impact on labor supply, saving, investment, etc.
However, broadening the base will have one other effect
as well; by reducing the extent to which the tax code
subsidizes alternative sources and uses of income, base-
broadening will reallocate resources toward their highest-
value economic use and hence will raise the overall size
of the economy and result in a more efficient allocation of
resources.
These effects can be big in theory and in simulations,
especially for extreme policy reforms such as eliminating
all personal deductions and exemptions and moving to
a flat-rate tax. But there is little empirical analysis of
broad-based income tax reform in the United States, in
part because there has only been one major tax reform
in the last fifty years. Still, there is a sound theoretical
presumption—and substantial simulation results—
indicating that a base-broadening, rate-reducing tax
reform can improve long-term performance. The key,
however, is not that it boosts labor supply, saving or
investment—since it raises the same amount of revenue
from the same people as before—but rather that it leads
to be a better allocation of resources across sectors of
the economy by closing off targeted subsidies.

For the taxpayer the frequent changes are so irritating but if the tax rate are goes down they are happy and vise versa

For professionals it's very irritating for the compliance of tax law . Thay have to understanding tax law again and agains.

The frequent changes are not goof in accordance to the professional