“Obama has appointed Paul Volcker to head a panel that will make recommendations for reforming our nation's tax laws. Volcker is also the head of the President's Economic Recovery Advisory Board.
The advisory panel will consider ways to simplify the tax code and reduce tax evasion, and will make recommendations to the President by December 4th, 2009, according to a White House briefing.”
As Bill points out in his post, the last time we had a panel to investigate how to “reform” the Tax Code was in 2005. That panel made some drastic, and by the way very good, recommendations on how to truly simplify our current system. However, either because of GW’s short attention span, because the Panel did not suggest what GW wanted to hear, or because more important things began to occupy GW, the recommendations were totally ignored by the President and the Panel just faded away.
In announcing the new Panel during the above referenced White House press briefing OMB Director Peter Orszag said -
“We are also forming and tasking the Volcker board, the PERAB, with three tasks: one is tax simplification; the second is closing tax loopholes and reducing tax evasion; and the third is reducing corporate welfare. And it's worth noting that with regard to that first category, one of the key things that the Volcker board will be examining is ways of unifying, streamlining, making more consistent the various credits that are out there: Making Work Pay, the Earned Income Tax Credit, the Child Tax Credit, and what have you. And in addition, with regard to the tax gap, there are hundreds of billions of dollars in uncollected taxes each year.
The Task Force on Tax Reform that will be formed by the Volcker board will be examining ways of being even more aggressive on reducing the tax gap, which could provide funding for tax provisions, including an extension of the Making Work Pay tax credit.”
While “tax simplification” is the first goal, the above comments seem to indicate that the Panel is not completely free to review and consider all possibilities and come up with a recommendation for the best tax system that it can, as GW’s Panel was supposedly created to do. It must come up with suggestions that maintain BO’s pet ill-conceived “Making Work Pay” credit and other fraud-encouraging refundable tax credits.
Once again I expect that if the Panel recommended anything that did not conform with BO’s pre-determined plans it will be ignored.
Forget the President. Such a Panel should be created with no pre-conceived notions or restraints to be free to consider all possibilities and present recommended alternatives for tax simplification directly to Congress for action.
I do not have high hopes for true and effective tax simplification during the Obama years.