Tax Reform: An Insider's View

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We often hear the question asked why the parties are unable to begin a Reagan-esque style tax reform effort if both are seemingly committed to the concept.

These folks point to the bipartisan "listening tour" House Ways and Means Committee Chairman Dave Camp and Senate Finance Committee Chairman Max Baucus are conducting in order to generate interest in a more sensible tax code.

But the respective parties have vastly different goals. Democrats wish to eliminate tax preferences in order to generate additional revenue for domestic programs and federal entitlements. For these Members, tax reform is a path toward increased revenue without the public pain associated with a renewed tax debate—and politically troublesome vote.

Conversely, Republicans desire a slimmer Code in order to generate less revenue. For these Members, tax reform means tax cuts and less fuel for the federal spending machine.

FYI: Any guarded optimism about a mega agreement was crushed by Majority Leader Harry Reid's recent statement that tax reform "can't be revenue neutral…There has to be significant new revenue."

Betcha Republicans never thought they would long for the days of Tip O'Neill.

The views expressed here are those of the author, Robert L. Ehrlich, the former Governor of Maryland who also served in the U.S. House of Representatives from 1995 to 2003.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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