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No Tax Reform Until Your Taxes Go Up, Say Democrats and Republicans

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Monday, 29 Jul 2013 07:56 AM Current | Bio | Archive

Sens. Max Baucus, D-Mont., and Orrin Hatch, R-Utah, have two very big problems in coming up with their latest version of tax reform legislation.

First, neither of them has any idea about what to reform in the tax law nor how to do it. Not a clue.

Second, even if they did — which they don't — Senate Majority Leader Harry Reid, D-Nev., announced that he wants additional tax revenue of $1 trillion or any form of tax reform is DOA.

This seemed like an opportune time for two senior senators to actually do something of importance since they are not running for re-election. Tax reform is on the top of the political campaign issue list in 2013, as it has been in every election since 1913.

This time, Baucus and Hatch had this bright idea of asking the rest of the Senate to give them some ideas before they dove into the annual political task of "tax reform."

The main idea was to start with something that they called a "blank slate" — meaning that the tax code would stay just the same, but the rest of the senate could suggest which deductions and credits could be eliminated.

To sweeten the deal, they promised their colleagues (of sorts) that anything in writing would be kept "secret" for the next 50 years. This is the same kind of procedure that is reserved for sensitive national security issues.

From my point of view, it stands as a clear admission that the Senate has no ideas what needs to be reformed in the tax code and neither does their staff advisors. All they seem to be getting is some political mileage out of some pretense of cutting welfare spending (which will never happen) and justifying raising more taxes.

The very idea that any tax reform suggestions that had any real reform possibilities is too politically toxic. It might get leaked to the press and then to the special interest groups that provide campaign contributions, votes or work for the other side of the aisle.

Of course the reality is that simplifying the tax code is absolutely absurd. The income tax was passed under the populist slogan of taxing the "rich." Having a simple, efficient, equal, economy-supporting and enforceable tax system was never a consideration.

Sen. Bernie Sanders, I-Vt., ever politically consistent, reflected this reality in writing back to Baucus and Hatch by saying:

"Everyone understands that our current tax code is too complex and must be simplified, but at a time when the American population is aging and investments in our crumbling infrastructure are desperately needed, we must not provide more tax breaks to profitable corporations and the wealthiest Americans who already are doing phenomenally well and in some cases pay nothing in federal income taxes."

In other words, the income tax system has been a disaster for the last 100 years, but we still need to tax the rich.

Reid, proving once again that he is politics all the time, declared that he wasn't even going to read the letter from Baucus and Hatch.

What he wants to see is a $1 trillion tax revenue increase before any consideration of tax reform.

Starting with a "blank slate" on tax reform, as far as Reid is concerned, is DOA.

But then again, let's face reality — the "blank slate" was never meant to be anything more than the usual crass political posturing over tax reform. It is a tried and true strategy to squeeze lobbyists for campaign funds and generate votes from the party faithful.

To sum up, the Democrats want more taxes on the American economy, while the Republicans want to have bipartisan support for tax reform, which will inevitably result in more taxes on the American economy.

Which party do you think is right on the tax reform issue?

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Kleinfeld
Democrats want more taxes on the American economy, while the Republicans want to have bipartisan support for tax reform, which will inevitably result in more taxes on the American economy.
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2013-56-29
Monday, 29 Jul 2013 07:56 AM
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