Friday, October 03, 2008
Editorial: Overdue tax reform
Both candidates in the 6th District want to overhaul the tax code.
From the RoundTable blog
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Unless you're an accountant who earns a living navigating the federal tax code, odds are you think the system needs help. The code is an unwieldy behemoth, rife with loopholes and handouts. So why hasn't Congress done anything about it lately?
Two men who want to represent Virginia's 6th District in the House of Representatives hope to spark action. Incumbent Republican Bob Goodlatte and his Democratic challenger, Sam Rasoul, both have plans to fix the tax system. Neither is actually workable, but they might be enough to start the conversation.
Washington last simplified the tax code more than 20 years ago. In 1986, a Democratic Congress approved legislation to remove a number of tax shelters and deductions, and reduce the number of tax brackets. President Reagan signed it.
Such periodic purges help clean up the handouts and tax breaks elected officials of both parties seem incapable of resisting.
Rasoul and Goodlatte would go one better. They seek a complete overhaul.
Good luck.
Goodlatte wants his congressional colleagues to scrap the entire tax code in three years. If lawmakers commit, he reasons, they would have no choice but to come up with a better alternative.
Congress usually performs poorly under pressure, and with something as serious as rewriting the entire tax code, the discussion would take a while. Maybe they could finish it before an artificial deadline, but it would be safer to come up with the replacement before doing something brash.
Goodlatte's preferred replacement is the FairTax. It's a national sales tax trendy among extreme Libertarians who refuse to recognize its fundamental flaws. It wouldn't work, but at least it's a starting point for discussions.
Rasoul's idea isn't much better. He proposes a "graduated flat tax," which is as self-contradictory as the name implies. He thinks Congress would end every tax break and tax all Americans as individuals. A world without deductions and loopholes to abuse sounds great, but it's not going to happen.
We don't know what a revised tax code should look like. We just know that a FairTax, graduated flat tax or other exotic, unworkable system isn't it.
But give them credit. Whoever wins in November at least wants to jump start an overdue tax discussion.
