Interesting and encouraging suggestions in the news today that President Obama wants to embark on significant tax reforms largely along the lines recommended by the Commission on Fiscal Responsibility and Reform. As noted in today’s NYT:
President Obama is considering whether to push early next year for an overhaul of the income tax code to lower rates and raise revenues in what would be his first major effort to begin addressing the long-term growth of the national debt.
The piece continues:
The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates — much like a bipartisan majority on Mr. Obama’s debt-reduction commission recommended last week in its final blueprint for reducing the debt through 2020.
Doing so would offer not only an opportunity to begin confronting the growth in the national debt but also a way to address warnings by American business that corporate tax rates and the costs of complying with the tax code are cutting into their global competitiveness.
This marks an interesting turn of events, one that will likely cause much disquiet for the Left while bringing a smile to the face of Arthur Laffer. Obviously, it is far too early to make predictions on whether such reforms are likely to be initiated. Undoubtedly, the politics will be quite complicated (recall the events surrounding the Tax Reform Act of 1986, which combined simplification of the tax code with a reduction of rates). For those interested in how this was accomplished a quarter century ago, the best account remains Alan Murray and Jeffrey Birnbaum, Showdown at Gucci Gulch.