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TAX REFORM: IMPOSSIBLE AND INEVITABLE?

April 04, 2005

Tax Analysts assembled a number of the veterans of the 1986 tax reform battles last week. They apparently weren't optimistic about things efforts, according to today's Tax Analysts online (subscribers only):

Appearing at a roundtable sponsored by Tax Analysts, the panelists seemed to agree that political sparring would likely sidetrack reform efforts. The environment was much more open to compromise 20 years ago than it is today, according to the panelists.

"What I doubt is there is the simplicity, the focus, and the ability to be bipartisan that will be essential for any meaningful reform," said Tom Downey, a House Ways and Means Committee Democrat in 1986.

Yet the panelists also said powerful forces would make the need for tax reform urgent:

Weinberger speculated that a confluence of events in the coming years would drive the country towards tax reform:

* the impending retirement of the baby boom generation beginning in 2008;
* the skyrocketing number of taxpayers subject to the alternative minimum tax; and
* the scheduled 2008 expiration of the 2001 and 2003 tax cuts.

They say that personnel losses in treasury and the loss of a non-partisan tax policy priesthood that existed 20 years ago made it much harder to draft reform options. That may be so; still I don't recall George Mitchell and Ronald Reagan, who managed to get the 1986 act togater, as being noticably non-partisan.

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