on tax reform... which is need in a bad way...

Taxing times for tax policy

It makes you wonder if the tax reform thing is serious.

Moreover, recent history on tax reform panels is not encouraging.  You might recall that President Bush also called for tax reform, and his bipartisan panel produced a pretty good plan.  But Bush pretended that some other president had asked for the report and ignored it. 

Obama's also not making this easy.  For one thing, his tax proposals would further gum up the tax code.  For example, his proposal to limit itemized deductions has gotten charities in a tither because they think it would stifle philanthropy. But it’s also really, really complicated.  Think “alternative maximum deduction,” cousin to the dreaded Alternative Minimum Tax.  Not a good idea.

And Obama would add to the hodge podge of credits and deductions that already mystify the tax system. 

Another problem: Obama keeps promising to never, ever raise taxes on 95 percent of Americans.  That pretty much rules out meaningful reform because you can't replace an irrational system with a rational one without changing some people's taxes.  Unless you're talking about major tax cuts (a bad idea), some people's taxes have to go up.

The president and the country have a unique opportunity to rethink taxes.  The stimulus bill passed in January enacted many of Obama's tax campaign promises through 2010, and most of the Bush tax cuts also run through '10.   If we’re very lucky and the economy recovers over the next year, the president will have a truckload of political capital that he could use to enact meaningful reform.

Meanwhile, let’s take a “time out” from unnecessary tax changes while we figure out how to make the tax system simpler, fairer, and maybe even capable of raising enough to pay for government. 

Posted via web from jimnichols's posterous