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  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: "homestead AT lists.ibiblio.org" <homestead AT lists.ibiblio.org>
  • Subject: [Homestead] Tax-reform proposals, dead on arrival?
  • Date: Thu, 27 Oct 2005 05:06:01 -0500

This is from this early mornings Gray Lady, with which many of you astutes refuse to register, fearing dire consequences, so I offer it in full herewith:

Editorial
Tax Reform for Another Day

Published: October 27, 2005

Nearly 30 years ago, in the waning days of the Ford administration, a compendium of tax-reform proposals entitled "Blueprints for Basic Tax Reform" was pronounced dead on arrival in government offices throughout Washington. A decade later, many of the ideas bore fruit in the vast and generally constructive Tax Reform Act of 1986.

The final report of President Bush's tax reform panel, due Tuesday, may have a similar fate. Popular discontent with advance word on its recommendations is sure to spook Congress into inaction in the coming election year, especially on proposals to limit the mortgage-interest deduction, abolish the deduction for state and local taxes, and reduce the write-off for employer-provided health insurance.

Tackling a job as challenging as tax reform in a serious and fair way requires exceptional leadership. Even if Mr. Bush has the desire and ability to take on such a task, there is the danger that the midterm elections will leave him too much of a lame duck to do it. Bipartisanship is also essential to rewriting the tax code, and that is hardly this president's strong suit. Mr. Bush is not even likely to have the support of his own right wing, which wants a less progressive tax code than the panel envisions.

That's fine with us. The panel's expected report deserves the death sentence that awaits it - but not because it's entirely unworthy. The panel appears to have done an admirable job of addressing many difficult issues in a competent way. Even the limits on popular deductions, which have inspired visions of a dagger pointed at the heart of the middle class, are not as objectionable when combined with other proposed changes that would make up for the loss of valuable write-offs for working Americans.

What damns this particular effort are the constraints placed on it from the outset. Mr. Bush directed the panel to assume that the temporary tax cuts passed during his first term - which mainly benefit the wealthy - would be made permanent, rather than expiring as scheduled in the next two to four years. The president also told the panel that a reformed tax code should raise the same amount of revenue that would be raised by a tax system in which his tax cuts had been made permanent.

Those assumptions build in a huge cut in future revenues that would ensure never-ending deficits and, with them, either tax increases to narrow the gap or sharp reductions in vital government programs like Medicare and Social Security. In fact, the cost of making the tax cuts permanent is three times as large as the long-term shortfall in Social Security.

The country needs a better tax system. But the president's insistence on making his tax cuts permanent has undermined his panel's efforts to address long-term needs.

The short-term answer, however, is simple: Congress must stop the bleeding from this administration's reckless tax-cutting agenda.

http://www.nytimes.com/2005/10/27/opinion/27thur2.html?hp





  • [Homestead] Tax-reform proposals, dead on arrival?, Gene GeRue, 10/27/2005

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