During his first month in office President Obama seemed to spend a good deal of time comparing his actions and polices to another famous Illini who got himself elected president — Abraham Lincoln.
During his second month, some pundits felt that his budget and spending proposals echoed those of another Illinois-born occupant of the Oval Office – Ronald Reagan.
Last week, however, he ventured from the comfort of his Midwestern roots and resurrected one of the lower-profile failures of a Texas president — George W. Bush – by forming a board to again try and reform the tax code.
For those with short memories, or others who understandably might have missed it the first time around, Bush the younger in 2005 established the President’s Advisory Panel on Tax Reform, a bipartisan group, that over a 10-month span, conducted over a dozen town hall-style meetings, interviewed hundreds of expert witnesses, and then submitted a pair of proposals to then-Treasury Secretary John Snow.
The first one promoted sweeping simplification of the current income tax system, while the second recommended changes for businesses that would lead to an indirect tax on consumption.
Under one plan, individuals would pay no tax on dividends paid by companies, while excluding 75 percent of their capital gains from taxation. Under the second, all investment income would be taxed at a flat 15 percent.
The administration then proceeded to do absolutely nothing with either.
But not to be deterred by past failures, last week President Obama asked former Federal Reserve Chairman Paul Volcker to head a task force to recommend a revamp of the tax code.
The panel includes some high-profile and former Beltway heavyweights, including: Laura D. Tyson, former chair of the President's Council of Economic Advisors during the Clinton administration; Martin Feldstein, former chief economic advisor to President Ronald Reagan; Roger Ferguson, chief executive of Teachers Insurance and Annuity Association; and former SEC Chairman William Donaldson.
In theory, at least, the task force was charged with submitting their recommendations by Dec. 4, 2009, which initially will focus on the usual suspects: tax simplification, strategies to reduce tax evasion, slashing the tax gap, streamlining tax credits, etc.
Unlike the marching orders delivered to the Bush tax team, the new and improved advisory cadre will have just two restrictions: no increase in taxes on families earning less than $250,000 per year, and no tax increases in 2009 or 2010.
Far be it from me to say that the tax code does not scream for a revamp. In fact, few would argue that it’s probably decades overdue.
But as we’ve learned with past attempts at reforming the tax code, the span between a recommendation and action can be longer, well, even longer than the tax code.
