The annual tax filing deadline, which comes next Tuesday, provides a good opportunity for tax reform advocates to decry the current law’s increasing complexity and inequities and to urge enactment of a simpler, fairer system.
While they differ on the best course, virtually everyone acknowledges it’s time to repeat the mid-1980s exercise that simplified the system and helped spur economic growth.
But the reaction to the recent proposal from the Republican chairman of the House Ways and Means Committee again made clear that today’s partisan political climate is likely to prevent early consideration of tax reform — let alone its passage.
Within a day after Congressman Dave Camp of Michigan outlined the overhaul he’d been working on for three years, any hope of doing something anytime soon wilted. It was buried by criticism from groups unwilling to accept broad-based tax cuts in return for elimination or reduction of some special-interest provisions.
House GOP leaders, who for three years have passed budgets promising sweeping tax reform, backed off. They dismissed Camp’s proposals by noting pointedly that this year’s budget “does not embrace any particular plan.”
Their negative reaction was a clear reminder of how hard it will be to draft something that gains the support of key figures in both parties and the White House. Politics today is a far cry from when President Ronald Reagan joined with the Republican and Democratic congressional leaderships in supporting the 1986 measure.
Even then, it took more than four years from the introduction of the first major reform proposal by two Democrats, Congressman Dick Gephardt of Missouri and Sen. Bill Bradley of New Jersey, to enactment of the Tax Reform Act of 1986.
This time, it may take even longer.
The 1986 bill reduced the number of tax brackets and eliminated many special-interest provisions, while raising capital gains and corporate taxes and providing a modest increase in revenue. Since then, many new deductions and credits have complicated the tax code and exacerbated inequities in which some wealthy taxpayers pay a lower real rate than middle-class Americans.