Tax reform may have effective Dynamic Duo
Monday , June 17, 2013 - 1:26 PM
Another Dynamic Duo is about to emerge on the national scene. We’re not talking about the Caped Crusader and Robin, although “Holy reform, Batman” could be a popular refrain if this pair has its way. Think in terms of (Alan) Simpson and (Erskine) Bowles on steroids, the Republican and Democrat, respectively, who stumped for debt reduction.
This team has what was missing from the S&B combo: the power and position needed to make meaningful change, especially in regard to how we are taxed federally and the organization assigned to making sure we pay up, the Internal Revenue Service.
As the summer begins, Senate Finance Committee Chairman Max Baucus and House Ways and Means Committee Chairman Dave Camp are preparing to join in a bipartisan, nationwide effort to get something done about the federal tax code that hasn’t had any significant overhaul since 1986. To describe it as anything less than a monumental task would be a disservice to understatement. If anyone has a chance of accomplishing that goal, it would seem to be the moderate Montana Democrat and the conservative Michigan Republican.
As unlikely a combo as that may appear on the surface, they seem to be on the same page when it comes to simplifying and rebuilding a tax system that has become a complex and overbearing monstrosity. Camp said it was out of step with most nations. In the process, they also made it clear to reporters in a joint appearance at a Christian Science Monitor breakfast here that the code probably wasn’t the only thing that needed restructuring. The IRS itself -- already under scrutiny by both their committees -- might well figure into their remodeling plans.
Separately, but almost in unison, they pledged to get to the bottom of the IRS’ targeting of conservative, tea party-aligned organizations that had applied for tax exemptions. And both said they were working to determine where the program originated. “We’re going to get the truth,” Camp pledged. Baucus took less of a hard line, saying that 90,000 IRS employees are “tough to manage” in a nod to his party’s leaders who want to paint it as a rogue operation out of one office and to keep the whole thing as far away from the White House as possible.
Rewriting the code usually takes two or three years, sometimes longer. So what is the urgency?
Two things seem at play here. Baucus is retiring after his term is up and wants his legacy to be a meaningful resolution to an antiquated system that millions of Americans consider unfair. The issues are many, and neither member of the duo wanted to specify his pet peeves. Also, speed, at least as they see it, is necessary to avoid being caught in the maelstrom of the 2016 presidential election. After the 2014 midterms, the entire focus will be on the run for the White House -- with taxes always a major issue.
Still, Baucus and Camp face a barn full of sacred cows, all with their own well-paid and formidable protectorate.
Any meaningful reform clearly will center on deductions -- charitable contributions, mortgage interest, personal and so forth -- and tax rates, always the elephant in the room. Is a flat tax finally viable? Can we substitute a value-added tax? If the deductions are curtailed, as they were in ‘86, can we be assured that the lower rates installed instead aren’t vulnerable to the political whimsy and spending of future Congresses?
If Baucus and Camp are able to get the needed traction to proceed, which seems likely, the lobbyists for all the special interests will ascend on Capitol Hill like the 17-year cicadas that already are plaguing us. Can we count on this new bipartisan team to even sell the idea of lasting reform with the muscle of Batman and Robin? Or, will they ultimately be like Simpson and Bowles and the debt commission: merely voices in the tax-and-spend wilderness?
Email Dan K. Thomasson, former editor of the Scripps Howard News Service, at email@example.com.