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Left-Right Coalition Seeks Revival Of US Tax Reform Debate

by Mike Godfrey,, Washington

11 December 2006

A history-making alliance between Sens. Ron Wyden (D-Ore.), Larry Craig (R-Idaho) and 15 organizations spanning the US political spectrum have pledged to work together toward a Congressional debate over federal tax reform.

The coalition's campaign is centered around the principles outlined in its "Cleanse the Code" statement, which contains three broad principles: Simplification, Transparency, and Certainty; Opportunity for All Americans to Get Ahead; and Fiscal Responsibility.

"Although we may disagree on the merits of a particular tax reform proposal (and each may have additional core standards for reform), we do agree that major reform - much as we saw in 1986 - is needed," the joint statement noted.

The Cleanse the Code effort was conceived by Wyden, who reached out to liberal and conservative organizations with a long history of involvement in tax issues, some of whom participated in the 1986 tax reform campaign that broadened the base of the income tax while lowering and simplifying rates.

The signatories ranged from the Progressive Policy Institute to the American Conservative Union, from the National Taxpayers Union to Citizens for Tax Justice, from the Taxpayers for Common Sense to the Center on Budget and Policy Priorities.

"Most taxpayers should be able to calculate their taxes on a single form or no form at all, and in most cases by themselves, with a few hours or less of preparation. ... A more transparent tax code would make it easier for individuals and businesses to pay the taxes that they owe, and for the IRS to help them comply with their obligations under the Tax Code," the statement continued.

"All Americans deserve a fair tax system that gives them a chance to get ahead in a marketplace economy. A tax code riddled with loopholes is not fair. Any reform effort needs to ... ensure that special preferences are not given to the few at the expense of the many.

"(O)ver the long-term the amount of revenue government collects and spends cannot be determined independently from each other. As a result of this interplay of revenue and spending, the goal of tax reform must be pursued in a fiscally responsible manner."

National Taxpayers Union President John Berthoud, whose organization was part of the team that assembled the coalition and statement, said that he was encouraged by the early, bipartisan progress that has been made toward deciding the future of the Tax Code in 2007.

"Each of our coalition members has a different vision over what our tax system should look like," Berthoud concluded. "But thanks to Cleanse the Code, lawmakers from both parties must now recognize that fundamental tax reform is an ideal shared by taxpayers left and right."

President Bush's Advisory Panel on Federal Tax Reform reported its recommendations in November 2005. The panel proposed two options: 'Simplified Income Tax Plan and Growth and Investment Tax Plan. Both plans would see a reduction in the number of income tax brackets, changes to corporate and investment taxes and the elimination of the alternative minimum tax.

However, little progress appears to have been made by the US Treasury since the publication of the tax panel's report towards advancing reform of the tax code.

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