A Bipartisan Drive for Tax Reform
In an unusual alliance prompted in part by the new Democratic majority in Congress, key Democratic and Republican budget officials are teaming up to push a tax reform agenda that they feel has a good chance in a divided government.
"It might be worth pointing out that in a split town, a Democrat and a Republican are getting together on some idea making," Noam Neusner, former Bush budget spokesman, tells U.S. News. He has teamed with former Clinton budget spokesman Larry Haas to push a new tax reform package with enough goodies for liberal and conservatives that it might actually lead to the junking of the current income tax system in favor of a consumption-based tax.
While both presidents have toyed with changing the tax code–President Clinton briefly considered a value added tax and President Bush a flat tax–the Neusner-Haas proposal is the first to reveal what both political camps consider a winning solution. Under their plan, the beginnings of tax reform would start in the upcoming budget deal. At a minimum, they suggest the deal would have to include both Democratic pay-as-you-go and the president's line-item veto, more fees, and a look at outdated government programs.
They even suggest a Social Security reform: Lower tax rates on worker wages while raising the threshold to just under $100,000 on wages subject to taxation, a win for both sides. And eventually, they argue that the income tax could be replaced by a consumption tax: Liberals would like the increased money and conservatives would like the increased savings such a plan would spark. To promote their idea, the duo are penning newspaper op-ed columns and giving speeches and talks on it.
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