US Comptroller General Urges Tax Increases, Reform

by Mike Godfrey, Tax-News.com, Washington

07 August 2006

Giving testimony before the Senate Finance Committee last week, US Comptroller General, David Walker argued for a different approach to boosting the nation's economy than the tax-cutting regime currently espoused by the Bush administration.

He told senators that:

"One of the biggest problems we have right now is we have this false theory that every tax cut is going to stimulate economic growth and they're going to pay for themselves."

Meanwhile, speaking with regard to the thorny issue of reforming the tax system, he stated that:

"As the Committee is well aware, two fundamental objectives of a tax system are (1) to raise revenue sufficient to fund projected spending and (2) to do so in a manner that is fair, relatively easy to administer, and minimizes negative effects on the economy. Unfortunately, over time, the accumulated changes to our individual tax system have not been consistent with these objectives and, not surprisingly, there is a growing debate about the fundamental design of the current tax system."

"The debate about the future tax system is partly about whether the goals for the nation’s tax system can be best achieved by reforming the current income tax so that it has a broader base and a flatter rate schedule, or switching in whole or in part to some form of a consumption tax. The President’s Advisory Panel on Federal Tax Reform has taken a major step in beginning this debate."

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