Opinion Editorial | |
| Monday, March 16, 1998 | |
Tax Code Abolition Going Nowhere |
The flat tax is possibly the best political issue the Republican Party has. In 1994 many Republican congressional candidates ran on the issue, which had been introduced by Congressman Dick Armey (R-Texas) earlier that year precisely in order to give them a positive issue to run on. In 1996, publisher Steve Forbes came from nowhere to become a major contender for the Republican Party's presidential nomination, almost solely on the strength of the flat tax. Unfortunately, Republicans, as they so often do, have dropped this winning issue. This impolitic decision resulted mainly from the unexpected political strength of an alternative approach to tax reform, the national retail sales tax, championed by House Ways & Means Committee Chairman Bill Archer (R-Texas). Rather than choose between the flat tax and the sales tax, Republican leaders decided to punt. Instead, they got behind a Quixotic effort simply to abolish the tax code by December 31, 2001, without specifying what, if anything, would take its place. The logic behind the tax abolition effort is to create an action-forcing event that will compel Congress once and for all to choose a tax reform plan and get behind it. The model is Michigan Governor John Engler's successful tax reform effort a few years ago, which came about only after the legislature first abolished the state property tax. This forced the legislature to adopt a new tax system, which largely conformed to Engler's proposal. The current congressional effort, however, is flawed and does not, in fact, follow the Engler model. In that case, the governor already had a clearly articulated plan for replacing the existing tax system. It was only a matter of getting the votes to pass it. But today, congressional Republicans do not have a clue as to what would replace the federal income tax if, by some miracle, the abolition bill became law. (Of course, Bill Clinton unquestionably would veto the bill.) As a result, the Republican effort comes across to voters as a transparent political ploy to harness support for tax reform without making any commitments as to what that reform will be. Thus it comes as no surprise that a new poll for the Republican National Committee finds that a majority of voters view the tax abolition effort as reckless. Congressional Republicans are also handicapped by not having a Republican in the White House. Whether they like it or not, history shows that strong presidential support is essential to any major tax reform effort. Congress is too fragmented and subject to outside political pressures to move a coherent overhaul of the tax code to enactment without the president being deeply involved and committed to the effort. Only the president is capable of standing above the process to ensure that what is produced at the end of the day conforms to some semblance of real reform. Also, the expertise of the Treasury Department is critical to ensuring that the pieces of tax reform all fit together correctly. Congressional Republicans should admit to themselves that if they are really going to overhaul the tax code they are going to need Clinton's help. Instead of pushing silly bills to just abolish the tax code, they would do better to pass a bill forcing Clinton to send a tax reform plan of his own to Congress. That would ensure a tax vehicle for deliberation that could realistically lead to legislation that can become law. It is my belief that the tax code is such a mess now that even a tax reform plan drafted by the Clinton Administration would be better. It is an option Republicans should consider. Source: Bruce Bartlett (senior fellow, National Center for Policy Analysis), March 18, 1998. Home | Support Us | All Issues | Social Security Debate Central | Contact Us |