Tuesday, November 15, 2005

Tax Reform: DOA

So sayeth Bruce Bartlett in a discussion of the efforts of the bipartisan panel which recently sent its report and recommendations to the President.

In short, the tax commission proposals are deeply imbalanced politically. Therefore, there is no chance whatsoever that Congress will adopt either one. The Treasury Department and the White House may find some way to salvage a more politically attractive tax reform proposal from the commission report, but unfortunately, they have little to work with.

Bartlett says that recommending the reduction or elimination of mortgage-interest, health-care, and state/local tax deductions in exchange for a tiny reduction in the tax rate is politically un-doable. And he's right.

The perspicacious observer may ask "why?" Why load the 'plan' with THREE political sacred cows? And why then offer only a 10% top-rate decrease in tax? Why maintain the utterly complex IRS Code almost intact?

Something smells, and it ain't in Denmark.

Either the panel's charter was flawed, or the panel and others associated with the project, simply do not want to see 'tax reform.' There are far too many intelligent and persuasive people who can make a case for either the Consumption Tax or the Flat Tax who must be asking the same question, and maybe they are coming to the same conclusion: The Feds want to keep the cash-flow and favor the complexity.

In other words, GWB's telling us "fuhgeddaboutit." Thanks, George!

No comments: