Ideas for Tax Reform
Recently, Tax Analysts released Toward Tax Reform: Recommendations for President Obama's Task Force , a collection of essays by 32 prominent tax lawyers, economists, and academics. Aiming to provide expert advice for the President’s tax reform panel – a special task force created by President Obama on March 26th to review the shortcomings of the U.S. tax system
– the writers were limited to around 1,000 words to ensure clear and concise recommendations.
The President’s special task force on taxation is part of the President’s Economic Recovery Advisory Board, chaired by Paul Volker. Their mandate is to: 1) close loopholes, 2) streamline the law, and 3) generate revenue to close the tax gap, which was estimated to be just under $300 billion last year. The recommendations cannot increase taxes in 2009 and 2010 or raise taxes on families earning under $250,000 a year.
We believe the commission should carefully review the recommendations put out by tax analyst. Many of them can make important contributions toward raising revenue more fairly and efficiently. But as we explained a few month ago, tax reform must do more than just improve tax compliance.
Especially in light of the dismal fiscal picture, we believe the task force should also focus on tax expenditures and alternative means of raising revenue. And we are highly skeptical that real tax reform can occur on the backs of those making over $250,000, alone. As Maya MacGuineas explained when the panel was announced:
“Everything should be on the table. Of course no one wants to see their taxes increased, but the President deserves a frank and honest assessment of what needs to be done. A lot is at stake here, and we can’t keep putting off big decisions.”
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