Signs Point to Comprehensive Tax Reform – Time to Gear Up?

0

Speaking at a Bloomberg breakfast last week, White House Senior Advisor, David Plouffe said this debate was a “moment of opportunity” to “do something on t

ax reform of a significant nature,” and at a news briefing, Speaker of the House John Boehner said that comprehensive tax reform is “under discussion” by the debt ceiling negotiators.

Plouffe and Boehner join a growing group of congressional committee chair and high ranking officials in calling for comprehensive tax reform including Senate Finance Committee Chair Max Baucus and House Ways and Means Chair Dave Camp. With the chairs of the two tax writing committees, the Speaker of the House, Senate Leadership and the White House all pulling for comprehensive tax reform, the focus may move to ways to craft a truly bipartisan comprehensive tax reform bill that maintains the graduated nature of the code important to Democrats while lowering rates on companies and individuals – an important goal for Republicans. Senators Wyden and Coats believe there are ways to accomplish this and can point to their own bipartisan tax reform legislation as proof.

Wyden and Coats sent a letter to President Obama, Speaker Boehner and Senate Majority Leader Harry Reid laying out the importance of comprehensive tax reform in the debt ceiling debate.  

The following quotes from congressional leaders indicate that there is a growing consensus for comprehensive tax reform.

Speaker John Boehner (R-OH), Speaker of the House of Representatives:
“We believe that comprehensive tax reform, both on the corporate side and the personal side, will make America more competitive, help create jobs in our country, and is something that is under discussion.” [Source: Reuters] 7/7/2011

David Plouffe, White House senior adviser:
“[T]his is a rare moment. They don’t come around all that often, when you seem to have bipartisan support and desire to try and to do something meaningful on the deficit. … [I]f you’re talking about something significant over the next 10 years and then something even more significant in the 10 to 20 years after that, in terms of deficit reduction, you’re not going to get that without domestic, the Pentagon, entitlement, revenues. … We’re not going to get tax reform DONE in the next, you know, month. But this is another moment of opportunity, where there seems to be an enormous, I think, consistency amongst the parties that this would be a moment, over the next period of months, to try and do something on tax reform of a significant nature. And I think that’s something the president feels we have to seize.” [Source: Politico Playbook] 7/7/2011

Senator Max Baucus (D-MT), Chair of the Senate Committee on Finance:
“Now is exactly the time to talk about tax reform. I am committed to tackling it.  That’s what our constituents sent us here to do. They sent us here to meet challenges, not to shy away from them.  They sent us here to make difficult decisions, not to ignore them.” [Source: Senate Finance Committee] 9/23/2010

Representative Dave Camp (R-MI), Chair of the House Committee on Ways and Means:

“What we need is a comprehensive reform of the tax code that expands the tax base and lowers rates. The Co-Chairs of the President’s Fiscal Commission recently offered some suggestions. Tax reform is an important part of deficit reduction because while an efficient tax code can ensure the government has the money it needs with as little drag on the economy as possible, a broken tax code that impedes growth will fail to generate sufficient revenues even if spending is cut dramatically. As the Fiscal Commission continues its work, however, I want to make clear that I do not and will not support a higher level of taxation to sustain a permanent and higher level of spending.”

“Yes, I aim to launch and fight the tax reform battle once again. And, I am well aware that this might ruffle those who have used the tax code to benefit particular industries or activities at the expense of economic efficiency, simplicity, and fairness. The tax code should collect the revenue the government needs as efficiently as possible. It should not be a tool of industrial policy… Politics and politicians should not choose the industry of the day; that is the job of our private economy as driven by the spirit of the American people and a nimble free market.”

“Here are my principles of reform: fairer, simpler, and conducive to growth.”

“If families and employers are unimpeded by a cumbersome and excessively complex tax code, not only will we earn the trust of the American people, we will help restore the hope and promise of the American Dream.” [Source: Camp.House.Gov] 11/16/2010

Senator Harry Reid (D-NV), Senate Majority Leader:
“I do believe that the country is ripe for tax reform. This is — our tax system — is broken and needs to be fixed.” [Source: Politico] 1/6/2011

Mitch McConnell (R-KY), Senate Minority Leader:
“I think we all know the tax code is a disaster, and we — any effort to simplify the tax code, to get the rates down to make it more fair, I think we’d be open to discussing that.” [Source: Politico] 1/6/2011

Senator Kent Conrad (D-ND), Chair of the Senate Budget Committee:
“This is no time for half-measures. What is needed is a bipartisan and comprehensive package that is similar in size and scope to the $4 trillion deficit reduction plan produced by the President’s Fiscal Commission. Importantly, the Fiscal Commission plan took a balanced approach, with discretionary spending cuts, including defense; entitlement changes; and tax reform that raises revenue. Both Democrats and Republicans had to move off of their fixed positions and make concessions in order to reach an agreement. That is what is needed to truly put the country back on a sound fiscal course.” [Source: Senate Budget Committee] 6/22/2011

Senator Mark Warner (D-VA), member of the Senate Budget Committee:
“Meaningful tax reform and meaningful deficit reduction has to be a goal of this Senate and of this Congress in the next year.” [Source: Senator Mark Warner You Tube] 12/14/2010

July 6, 2011
                                                                      
Dear Mr. President, Mr. Speaker and Mr. Leader,

Like many Americans, we are frustrated that the debt-ceiling negotiations have devolved into a partisan stalemate.  While some may argue that just singling out programs and tax breaks offers some short-term political advantages, this debate doesn’t create winners.    A short-term agreement to extend the debt-ceiling also doesn’t give the American people anything to cheer.  It doesn’t create jobs, increase economic certainty or even guarantee that Congress and the White House won’t be locked in a similar stalemate next month or next year.

We have had this debate before and we will keep having this debate as long as we continue to argue around the edges of the country’s economic and budgetary problems.  This is not a problem that either party could solve by just taxing or just cutting.  As the Commission on Fiscal Responsibility and Reform found, resolving the nation’s debt crisis demands comprehensive, structural change, including tax reform.  As you negotiate an agreement on the debt ceiling, we believe you must use this unique opportunity to move beyond debates focused only on piecemeal cuts to government programs and tax provisions targeting specific industries and incorporate real change in the form of comprehensive tax reform.

Tax reform can move us beyond this partisan stalemate. Done right, it will create good-paying jobs and provide businesses and families with the certainty they need to plan for the future. There’s no better way to raise revenue and reduce the deficit than by growing the economy and putting Americans back to work.

Comprehensive tax reform will do the following:

1.        Boost the economy without increasing spending. Tax reform has a record of creating jobs and growing the economy. During the two years that followed the last comprehensive reforms in 1986, the U.S. economy created 6.3 million new non-farm jobs. That can happen again.

2.        Create a simpler, more business-friendly Tax Code that increases tax revenue without raising tax rates. The right Code will lower corporate tax rates and make American businesses more competitive, which will help businesses create jobs that pay middle class wages. This means more revenue without higher tax rates.

3.        Help families and businesses plan for the future.  Long-term planning is next to impossible today because much of the current Code is temporary – from the tax rates to the rules affecting capital gains to those for business incentives. Reforming the Code will provide certainty for American businesses and families.

Tax reform is one of the best tools in the economic tool shed, and it’s time to use it. We know it won’t be easy. We know it requires Democrats and Republicans to work together to take on the special interests that currently benefit from the broken tax system and we know that right now that seems impossible.  But it has been done before and it can be done again. We are proof that bipartisan agreement is possible.

We recognize there is not enough time to pass comprehensive tax reform between now and the August 2 deadline for raising the debt limit, but there is no reason why any debt-reduction agreement should not include a timeline for enacting tax reform before the end of this year.

Therefore, we believe it is vital that any debt-reduction plan you negotiate contain a commitment to comprehensive tax reform, and ask you to include a timeline for completing it by the end of this year.  It is not only the best move for the economy, it is the best opportunity we have to deliver tangible results for the American people.

Ron Wyden                                Dan Coats                
United States Senator                 United States Senator

Share.

About Author

Avatar

Leave A Reply