Snow Promises Tax Code Simplification

by Mike Godfrey, Tax-News.com, Washington

30 March 2006

Speaking at a meeting of the Tax Executives Institute this week, US Treasury Secretary John Snow pledged tax code reform in order to simplify the legislation.

Citing Albert Einstein's famous remark that the tax code was the only thing "inpenetrable to the human mind", Mr Snow announced that:

"I'm here to let you know how dedicated I am, and how dedicated President Bush is, to making the tax code better for all Americans. That means simpler and better for businesses and individuals, fairer and more pro-growth. The President has shown real leadership on improving the tax code already throughout his term, acting on major pro-growth tax relief measures in 2001, 2002, and 2003, and in signing the JOBS bill in 2004."

He continued:

"Simpler-but-fair, as you well know, is a hard balance to strike. The President's Panel on Tax Reform did some excellent work on this subject, and it was an important first step toward eventual overhaul of the code. This is something that we only get the chance to do every 20 years or so. And so we need to take the time to do it right, to build understanding and to build support for change."

However, he went on to add that:

"We have to be very careful to avoid the temptation by some to use "tax reform" as cover to actually raise tax rates! That is not real tax reform--and it would be a step in the wrong direction. As virtually all main-stream economists will tell you, higher tax rates actually create dead-weight losses by reducing economic output."

"Rather, as we move along toward pro-growth tax reforms, Congress must take action right now to make sure we keep tax rates low. We need to make the President's tax relief permanent, period. Congress especially needs to extend capital gains and dividends tax rates which have been at the center of millions of new jobs, and rising incomes for American families and businesses."

Recommended