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TREASURY: TAX REFORM STILL A 2005 PRIORITY

December 16, 2004

Contrary to speculation that tax reform would be a secondary priority to Social Security changes, a treasury spokesman yesterday said that the Treasury will deliver a tax reform proposal in "early 2005."

Both Pamela Olson, former tax policy chief at Treasury, and George Yin, Joint Committee of Taxation Chief of Staff, said AMT reform would be critical to any package, according to an article by Tax Analysts.

Of course, they may "fix" AMT by embracing it. Comments by Treasury Secretary Snow yesterday seem to point in the direction of an AMT like code with a broader base and fewer deduction, rather than a pure flat tax or national sales tax. Speaking of the President's plans, Snow said:

   His goals are to make the code simpler and to 
   increase long-run economic growth and job creation. 
   He believes taxes should be applied fairly, and that 
   reform should recognize the importance of 
   home ownership and charity in our American society.

While those two sentences could contain multitudes, the references to home ownership and charity seem to telegraph a revised version of the current system with fewer deductions and lower rates, rather than a whole new system.

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