All over the tax blogs today has been coverage of the President's Debt Reform Panel's Tax Reform Panel options for cleaning up the American Tax Code. It looks well thought out and I intend to give it much more study over the next couple of days. But it doesn't matter what the options suggest, it won't happen. Pieces here and there might be adopted but a much needed overhaul of the tax code won't happen. We don't have the politicians who can pull it off right now. Congress is full of men and women who are more interested in grandstanding and partisanship than solving the country's problems.
Im 1988, Jeffrey H. Birnbaum and Alan S. Murray published their book on The Tax Reform Act of 1986; Showdown at Gucci Gulch. This wasn't an analysis of the new rules but coverage how the law came to be. And it illustrates why tax reform won't happen now.
In 1986, tax reform was the passion of President Ronald Reagan and Senator Bill Bradley. They represented different parties but both had been burnt by taxes in their previous careers. Reagan, the actor, and Bradley, the basketball player, found themselves turning down opportunities because the taxes would almost be more than the job paid. They both vowed to fix the tax system. In 1986, they did just that. They didn't work alone. They had a talented group of politicians who could work the system and did. With the talents of the Treasury Secretary James Baker (former Reagan Chief of staff), Sen. Robert Packwood, Rep. Dan Rostenkowski and Rep. Tip O'Neill, Reagan and Bradley saw major tax reform
Today, I don't see anyone in power with the passion for reform. The Tea Party people just want to pay less themselves, to get the credits like "the others" get. The truth is current tax rates are reasonable. But to lower them, something has to be given up like tax credits or services. We can't assume that eliminating "waste in government" will generate enough revenue to make a big dent in the tax rates. And even if there were highly passionate leadership support for tax reform, it would take a group of equally determined legislators to make it happen. We would need old school politicians who understand compromise not officials who are more interested in making points for their party than helping all Americans.
I hope I am wrong. I hope a group of legislators step forward and take up the challenge to convince their colleagues to work together on true tax reform. But, I'm afraid we won't see that happen.