Recently, I received a blast e-mail from a group who identified themselves as "concerned citizens" of my town. Without getting into shopworn specifics that most of you would not care about, these self-appointed monitors of fiscal prudence decried rising taxes and exhorted the local government to rescind a quasi-moratorium on development in order to generate more tax revenue.
Not surprisingly, the puppeteer was one of the local builders, whose other proposals over the years for the bucolic area have included a lighted driving range, a CVS and a hypermarket.
This is hardly the first time I've received a missive from him or his followers about rising taxes and the need to take action. But conversely, his proposals to remedy the situation have often contained some of the most suspect accounting since the audits of Enron and WorldCom.
Which brings me to tax reform on a macro-level.
If, as Sherman and Mr. Peabody used to say, we turn the Way-Back Machine to circa 2005, you'll recall that then-commander-in-chief George W. Bush assembled a bipartisan group called the President's Advisory Panel on Federal Tax Reform. The panel was charged with a basic, yet imposing mandate: reform the current Tax Code to make it simpler, fairer and, perhaps more important, pro-growth.
The panel conducted a series of meetings over the ensuing months, (including several of its members visiting the editorial offices of Accounting Today) in an effort to elicit suggestions and advice on reform measures. At the end of that year, the group submitted its report to the Treasury Secretary.
I actually had to research our archives and consult with our senior tax editor to remember what the reform plans of five years ago advocated. One was called a "Simplified Income Tax Plan," which called for creating four tax brackets at 15, 25, 30 and 33 percent; replacing the standard deduction personal exemption, Child Tax Credit and Earned Income Tax Credit with family and work credits; and reducing capital gains. The other was a "Growth and Investment Tax Plan," which would have established a trio of tax brackets - 15, 25 and 30 percent - and called for a 15 percent tax on dividends, capital gains and interest. Both also would have abolished the Alternative Minimum Tax.
And guess what happened with those suggestions?
If you answered, "Nothing," you get to advance to the next round.
As one top Democrat quipped, "Tax reform not only went from the front burner to the back burner, it got kicked out of the kitchen."
Last month, after a series of delays dating back to 2009, the latest cadre of those charged with tax reform - specifically, the President's Economic Recovery Advisory Board - delivered its long-awaited report on tax reform options, which discusses the pros and cons of many different tax proposals, but does not recommend any. The report was supposed to be delivered last December, but was delayed by committee chairman Paul Volcker (who was Fed chair the last time the Tax Code was reformed) after being inundated with hundreds of submissions on tax reform.
Whether or not the contents of the PERAB report will prompt more action than the 2005 report remains to be seen. But if the current occupant of the Oval Office is to be taken seriously about his pledge to grow the economy, the current report should not be allowed to ossify like its predecessor.
On a somewhat smaller level, I'll expect a progress report from our local Tea Party members any day now, and hopefully it won't be accompanied by a renewed recommendation to build a driving range.
Bill Cartino, Editor-in-Chief
