Tuesday, June 11, 2013

Tax Reform? You Should Live So Long

Let's get income tax reform done in 2013, urges the Billings Gazette. This former Congressman believes tax reform can happen. Most taxpayers, not to mention most voters, probably hope he's right.

Before you get your hopes up, read Stan Collender: No Tax Reform Before The End Of This Decade. Collender is an old Washington hand and erstwhile staffer on Congressional tax committees. The last great effort at tax reform took three years to achieve, he points out. And Congress was relatively functional in those days. What's more, the 1986 Tax Reform Act had a dynamic champion in Dan Rostenkowski.

 If we can update the corporate tax and classify carried interest as income by the time Obama leaves office, we should count ourselves lucky. 
Posted by JLM at 10:11 PM
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1 comment:

Jim Gust said...

The 1986 Tax Reform was scored as revenue neutral. In fact, it raised much more revenue than was scored because the economy started growing so much faster than projected. Nonetheless, the starting point of real reform is revenue neutrality.

The Democrats are adamantly against that. In their vocabulary, tax reform means higher taxes on the rich, even though they just achieved that rather dramatically last January, with the dual hits of new Obamacare taxes coupled with the expiration of about 20% of the Bush tax cuts.

So I agree, there is zero chance of real tax reform. There's also no chance of corporate tax reform, because it would be scored as losing money.

Why carried interest can't be taxed properly remains something of a mystery to me. I guess the rich really do have disproportionate political clout.

1:56 PM

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