Jul 15, 2011
A Passionate Plea for Principled Tax Reform
Consider This…
It seems as if all eyes in Washington (and beyond) are focused on what to do about the debt ceiling. Yet, at the same time, the House Ways and Means Committee and the Senate Finance Committee have been slogging through a series of hearings and briefings on fundamental tax reform. Those efforts are laying the groundwork for pursuing serious tax reform. And the timing on that effort may be sooner than we originally thought.
With that in mind, we’d like to draw your attention to a very well-crafted and thoughtful speech on tax reform by the Ranking Member of the House Ways and Means Committee, Sandy Levin (D-MI).
Congressman Levin starts with a simple premise: Yes, we need tax reform; but no, we should not accept as gospel that the right way to reform is to lower tax rates and eliminate tax credits and deductions.
He goes on to talk about what housing, savings, and education tax credits and deductions have done to benefit the middle class. Levin concludes that throwing out those credits and deductions to make room for what he believes are arbitrary tax rate targets would be true folly.
After making that argument he turns to the charitable deduction and admits the benefits of the deduction are “somewhat more concentrated in the upper-income range.” That being said, he believes the charitable deduction is worth preserving given that, “one has to keep in mind that the recipients of the contributions include universities, hospitals, churches and soup kitchens that provide critical services to working families.”
The need for fundamental tax reform keeps popping up in the context of the ongoing, torturous debt ceiling talks. For that reason, at the end of the day, we believe we could be on a glide path to a tax overhaul sooner rather than later.
If you’re interested in the debate around reforming our tax code, we suggest your reading include the Levin speech. Access the full speech below.