Thursday, January 20, 2011

Tax Reform -- Will We Get it? What Will it Look Like?

Oops, you read the title of this and you thought you were going to get answers from me? Readers certainly know that I am neither insightful enough to know nor bold enough to even make a prediction. But, both parties say that we need tax reform.

So, it should be easy, right? 51 Republicans have signed on to the Fair Tax. In the 2008 election, however, some Republican candidates who support the Fair Tax were pounded in commercials saying that they were proposing adding a 23% national sales tax. That was correct, to a point, but the same commercials didn't note that the same people were proposing an elimination of income taxes, FICA taxes, and other taxes under the Internal Revenue Code.

Republicans as a group favor the lowering of income taxes. Democrats as a group favor simplification of the Code and elimination of deductions frequently taken by high earners, but not available generally to lower earners. At the end of the day, methinks that each is simply staking out the position that will get them the most votes.

In 1986, the protagonists were these: President Ronald Reagan, Speaker of the House Tip O'Neill, House Ways and Means Chair Dan Rostenkowski, and Senate Finance Chair Bob Dole. It took them 3 or 4 years from when they started (memory tells me that the first proposal put forth that eventually morphed into TRA 86 was in late 1983 or early 1984), but they got something significant done.

People who have read about it may remember that we changed from a myriad of marginal tax rates to just two -- 15% and 28%. I think that lasted for a year.

In any event, the voters are calling for tax reform. Plenty of polls say so. And, if you want the down and dirty from the hill, check this out:

While you're at it, see if you can figure out where Jamie Dupree's biases are. I'll bet you can't. He is, in my estimation, the only unbiased political reporter in the United States. That's a mean feat.

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