Rangel Pushes Tax Reform On Anniversary Of Reagan Tax Cut

by Leroy Baker, Tax-News.com, New York

23 October 2007

Monday's 21st anniversary of the signing of the Tax Reform Act of 1986 by President Ronald Reagan should serve as a call to action for the next round of major reforms to the US tax code, senior House Democrat Charles Rangel has told his Congressional colleagues.

In a statement issued on the anniversary of Reagan's signing of the Tax Reform Act, which managed to simplify the tax code, cut taxes for companies and individuals, and remain revenue neutral, Rangel pointed out that a Republican administration was forced to work with a Democrat-controlled Congress to get the reforms into law. He argued that a similar spirit of bipartisanship now needs to be revived if current tax reform challenges, such as dealing with the alternative minimum tax system, are to be met.

“The time for a serious discussion on tax reform is long overdue,” Rangel stated. “Later this week I will introduce a tax relief and simplification package to provide benefits to more than 90 million American families while also helping ensure that our companies remain competitive internationally."

"It is my hope that the Bush Administration will seize this opportunity, as the Reagan Administration did 21 years ago, to work with Congress to simplify the tax code and put money back in the pockets of working families. It has been 21 years – it’s time to talk.”, he added.

Rangel says that his new legislation will provide tax relief for millions of working families through a permanent repeal of the individual alternative minimum tax and an enhancement of other tax benefits, while also significantly improving the competitiveness of American businesses.

Furthermore he adds, as in 1986, this proposal would be fully offset by closing loopholes and "otherwise adjusting current law to provide greater equity and fairness in the tax code while also encouraging businesses to invest and incorporate in the United States". This will likely involve new measures to curb private equity and hedge funds from taking advantage of lower rates of capital gains, while limiting the opportunity of companies to incorporate offshore.

Rangel claims that this legislation will be "the most comprehensive overhaul of the US tax code introduced since the 1986 Act". However, with Democrats and Republicans at odds on many tax and spending issues, and with the Bush administration's own ambitions for long-term tax reform seemingly kicked into the long grass, the chances that the legislation will see the light of day with a Presidential election round the corner are being seen as increasingly remote.

Recommended