As the due date for federal personal income taxes approaches, taxes seem to be very much on many people’s minds today. Not the least of those is the chairman of the House Ways and Means Committee who takes to the pages of the Wall Street Journal to pitch the tax reform his committee has come up with:
Last year, my Democratic counterpart on the Ways and Means Committee, Sandy Levin of Michigan, and I created 11 bipartisan working groups to tackle different parts of the tax code. One of those, headed by Diane Black (R., Tenn.) and Danny Davis (D., Ill.), looked into those education provisions. After months of work, the leaders of the working group recently came forward with a plan that consolidates four of these provisions into one improved credit, making it easier for families and students to afford a college education.
Paired with more commonsense reforms like increasing the standard deduction and the child tax credit will mean that nearly 95% of the country can get the lowest possible tax rate by just filing the basic IRS 1040A form—no more itemizing, no more keeping track of all those receipts, and no more filling out all those extra schedules, forms and work sheets.
Second, the tax code will be made more effective and efficient by getting rid of special-interest handouts, which will mean lower tax rates for individuals, families and all businesses. Under this plan, over 99% of tax filers will face a top tax rate of 25%—allowing small and large businesses alike to expand operations, hire new workers and increase benefits and take home pay. On the individual side, there will be an introductory bracket of 10%.
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Third, make the tax code fairer and more accountable. That means no more hidden provisions that benefit a favored few, and no more tax increases to fuel more spending.
Most Americans aren’t aware of it but the chairman of the House Ways and Means Committee is one of the most powerful people in the country, second or third most powerful in the House by most accounts. Remember Tommy Lee Jones’s portrayal of Thaddeus Stevens in Lincoln? Stevens was chairman of the House Ways and Means Committee. It used to be that the majority leader and chairman of W&M were synonymous. The committee has its finger in almost every pie, determining what the House will or won’t do. The Speaker decides what will come to the floor. The chairman of Ways and Means determines its contours.
Tax reform isn’t just a discussion about the minutiae of tax rates. It’s an argument about the nature of the country. Historically, we’ve had major tax reform roughly once every twenty years. The last such reform was 30 years ago—we’re overdue.
Tax law doesn’t stand still between major reform. It’s changed so frequently it’s impossible for anyone to really understand it. It gathers accretions like a ship gathers barnacles and, like barnacles, the accretions impede progress. Postponing major tax reform is a statement itself. It says that wealthy and powerful interests will have increasing power in the country.
The last such reform was 30 years ago—we’re overdue.
Okay, would you trust the lot in Washington now with any kind of major reform? I can’t imagine any one of them up there now that I would trust to check on my cats if I went on vacation.
Thank you, Ellipsis. You’ve given me the entrée to something I wanted to work into the post but decided to cut. Lots of things in life—caring for children or pets, cooking, chemical reactions, just to name a few—won’t wait until you’re ready for them. They’ve got to be tended when they need tending rather than when you’d prefer to tend them. Would I have preferred serious tax reform five years ago? Ten years ago? Sure. It can’t wait that long.
The barnacles that will accumulate on the tax code (and the whole ship of state) while we wait for the perfect time will make the perfect time that much harder to realize.
Schuler, given how well the current goons did reforming the healthcare system, I think we can’t afford to ‘fix’ the system now. They’ll reform the tax code and all our lawns will die. (Very obscure reference, but I think the point is clear enough.)
I’m still waiting for healthcare reform.
And, as Will Rogers said 80 years ago, the difference between death and taxes is that death doesn’t get worse when Congress is in session. Some things never change.
Of course the problem with waiting is that things aren’t going to change. The districts are so gerrymandered and the campaign laws are so rigged that there is no hope of getting a congress or president that is either competent or cares about anything other than their own career.
You should work what you wanted into the body of the post. No guarantee that people reading the post wil read the comments, and you may as well make your point. Plus the comments are not as easy tow search as the posts. It may make your life slightly easier down the line.
“…Postponing major tax reform is a statement itself. It says that wealthy and powerful interests will have increasing power in the country…”
Wealthy people already have a disproportional influence over our politics and Government…and recent jurisprudence has insured them with a Constitutional Right to even more sway.
I think Camps proposed reforms are an excellent starting point for a discussion that will, unfortunately, never happen.
However, in order to have that conversation we need to talk in terms of effective tax rates. Quoting rates that no one actually pays only clouds the issue. Almost 10% of 288 profitable companies in the Fortune 500, including Boeing, GE, and Verizon, paid 0% taxes from ’08 – ’12. 111 of those paid 0% taxes in at least one of those years.
As I’ve said any number of times in the past I think that the corporate income tax should be abolished and the personal income tax on the highest earners raised to make up for the difference in revenue.
The corporate income tax mainly serves as a way of preventing upstarts and employing tax attorneys and accountants. I think there are more effective ways that money could be spent than tax avoidance.