Senate Budget Committee Holds Hearing on Tax Reform
The Senate Budget Committee held a hearing on tax reform this morning, featuring testimony from four witnesses who all unequivocally called for fundamental reform to our tax code.
In his opening statement, Committee chairman Kent Conrad (D-ND) – who has repeatedly stressed the need for the government to adopt a long-term fiscal plan – called the U.S. tax code “indefensible”, and said that an agreement on tax reform must be reached this year, not be put off once again. He also called for reform that’s along the lines of the tax proposals in the President’s Fiscal Commission report; reform that repeals tax expenditures, broadens the base, and reduces rates across the board.
Echoing similar sentiments, Donald Marron of the Tax Policy Center called our tax system “broken”, saying:
"It’s needlessly complex, economically harmful, and often unfair. It fails at its most basic task, raising enough money to pay our government’s bills. And it’s increasingly unpredictable, with large, temporary tax cuts not only in the individual income tax, but in corporate, payroll, and estate taxes."
Like the momentum behind debt reduction, the momentum behind tax reform has also been building. In his State of the Union speech, President Obama himself called for tax reform – specifically to lower the corporate rate, an idea that has also gotten increased attention lately. A significant amount of time was spent discussing this issue in today's hearing, and ranking member Jeff Sessions (R-AL) even said – in what could be a break from traditional party lines: "I think we need to figure out a way to reduce the rates. And if it has to be paid for by some tax increases in other areas, I'm willing to consider doing that."
CRFB board member and Urban Institute scholar Gene Steuerle summed up how support for reforming the tax code spans the political spectrum in his testimony.
"Many tax and budget reforms know no ideological or party boundaries. While legitimate debates transpire on degrees of progressivity or size of government, no one favors the unequal justice, inefficiency, and complexity we see in our tax code today. Neither does anyone really favor the ways that tomorrow’s scheduled deficits—over and beyond any amount related to recession—threaten economic slowdown and place unfair burdens on our children."
By broadening the base and reducing rates, we can simplify our tax code and reform it in a manner that promotes economic growth and international competitiveness. CRFB applauds the early steps that Congress and the Administration are taking and we hope that momentum continues to build.
Click here to read about some of our tax reform ideas.