Economists Urge Bush To Concentrate On Cutting Taxes

by Mike Godfrey, Tax-News.com, Washington

17 November 2004

Economic advisors who helped to shape George W. Bush’s first term tax cuts have advised the President to concentrate on cutting tax across the board in his final four years, rather than attempt more fundamental, and politically contentious, reforms such as the introduction of a flat tax, according to the Washington Times.

Keen to carry through deeper reforms of the tax system in the coming term, Bush has revealed that more radical options, such as the replacement of income tax with a national sales tax or some form of flat tax are being studied.

However, some experts suggest that the President would achieve more by continuing to cut rates rather than push through such politically ambitious reforms.

"The best thing to do is what Reagan did and keep lowering the income-tax rates across the board," argued Martin Anderson, a former policy advisor to both Reagan and George Bush senior, in an interview with the Washington Times.

Anderson suggested that a flat tax would be very difficult to implement, as some income groups would invariably end up paying more tax.

Other economists, such as White House tax and budget advisor John Cogan, also feel that broad tax cuts are a more achievable goal than seeking to replace the current tax system with a flat tax.

Cogan was quoted by the Times as arguing that a more desirable target for the current Bush administration is "a simpler tax system that has fewer tax deductions and credits and lower tax rates on both the corporate and personal side".

Meanwhile, Michael J. Boskin, the former chairman of the President's Council of Economic Advisers and a senior fellow at the Hoover Institution of Stanford University, believes that a flat tax has its merits, but could “well be beyond where our political system is now likely to go".

With Bush also hoping to put in place ambitious social security reforms, doubts have been raised as to whether comprehensive tax reform can be achieved simultaneously.

However, Cogan believes that the President will seek to tackle the former issue early on in the term, turning his attention to tax reform in 2006.

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