Tax Reform

From an email I received from Fairtax.org:

The Senate's top tax-writer expressed doubts Tuesday about prospects for a major overhaul of the tax code, dealing a blow to one of President Bush's top priorities two weeks after his re-election.

Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, said comprehensive tax reform would be "difficult" to do. "I'm not one to spend a lot of time tilting at windmills," he said.

Grassley said Bush would have to aggressively use his "bully pulpit" to win wider popular support. After the election, Bush said he had earned "political capital, and now I intend to spend it" by pushing for changes in the tax code and Social Security, among other things. But Grassley said, "I'm not sure how much political capital (the president) is prepared to spend on it."

Bully Pulpit? Sounds like Grassley is not a Bush supporter. And I think the President is prepared to spend a LOT of political capital on tax reform.

Grassley's view is important because all tax bills go through his committee. In an interview with USA TODAY, he said Bush made a mistake by not talking about tax reform more often and more explicitly in the campaign. "I think there was a missed opportunity," he said.

White House spokeswoman Claire Buchan said Bush "talked daily during the campaign about the importance of making the tax code simpler, fairer and more conducive to economic growth, and he looks forward to working with Congress on this priority."

Bush has called for simplifying the tax code in a "neutral" way that would not significantly raise or reduce tax revenue. That could make changes tougher, because any big tax cuts for some would have to be paid for with increases for others, creating winners and losers.

The White House is assembling a bipartisan panel that's expected to make recommendations before Bush settles on a specific proposal next year. Among his options is the replacement of the progressive income tax with a single, "flat" income tax rate or retail sales tax.

Grassley suggested that he favors more incremental changes: making the 2001 and 2003 tax cuts permanent, closing loopholes, shielding middle-income Americans from tax increases, and reducing the tax burden on savings and investment.

The last time Congress overhauled the tax code was in 1986 under President Reagan. That law broadened the tax base by slashing loopholes. It collapsed 15 income tax brackets, topped by a 50% rate, into two rates of 15% and 28%. Since then, new tax breaks have been added and the number of brackets raised to six, topped by a 35% rate.

Perhaps I am mistaken, but isn't the job of the chairman of any Senate committe supposed to do the "difficult"? That is, if he is interested in the issue in the first place. It sounds to me that Senator Grassley isn't interested in overhauling the tax code, much less replacing it with something that would actually help the people who elected him to office. Isn't it his job, as senator to represent the people of his state, and by extension, the people of the United States? The POTUS wants to overhaul the tax system, but Senator Grassley apparently thinks it would be too "difficult".

I believe that the next election cycle will revolve around the economy. It would behoove him to educate himself regarding the tax code and the various platforms that have been proposed to replace it. I think it's grand that the Senator favors more incremental changes, but I don't think that's what the President or the people of the United States has in mind. I know it's not what I want. Regular readers know my stand on tax reform: get rid of the IRS, eliminate payroll taxes, install a national sales tax, and let the wage earner spend the money he has earned however he (or she) wants! What a concept!

The last time the tax code was reviewed was 18 years ago, under Reagan. Isn't it time to do some housecleaning?

Maybe Senator Grassley has forgotten that Tom Daschle was voted out of office. I don't begin to speak for the citizens of Iowa, but it would be a good idea to be mindful of what happened to Daschle. If it happened once, it can happen again. I think the days of politicians being re-elected simply because they are the incumbent are coming to an end.