Meeting for the first time since July, the President's Advisory Panel on Federal Tax Reform began focusing discussions on what recommendations will be included in its report, due on Nov. 1.

Panel Chairman Connie Mack , a former senator, said the day's agenda would include discussions of three major tax expenditures in the current code -- housing, charity and health care. The executive order that established the panel asked the group to recognize, "the importance of homeownership and charitable giving in American society." Mack said provisions relating to health care are the single largest set of tax preferences in the code, affecting almost all Americans.

In July, Mack said the panel had requested the U.S. Treasury to create a comprehensive income tax and a comprehensive consumption tax modeled on a flat tax. Both of those systems were built on a tax base with a minimum of deductions, credits and exemptions and Mack said many issues associated with a clean tax base -- such as the lack of a work credit like the earned income tax credit, and the lack of savings incentives in a comprehensive income tax - were mentioned from both an individual and business perspective.

The meeting was expected to close with reports from two of the panel's working groups, the first who studied a partial replacement value-added tax and the second reporting on the possibility of a full replacement national retail sales tax or value-added tax.Hurricane Katrina brought on a one-month delay for the panel's original deadline to issue its report. Established by President Bush in January, the bipartisan panel will submit a report on possible reforms to the tax code, ensuring any changes are aimed at making the country's tax system simpler, fairer and more oriented to economic growth while remaining revenue-neutral. The next meeting will be held Oct. 18.

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