Deficit-cutting tax code reform plan collects dust in D.C.

By Mark Singletary Dolan Media Newswires NEW ORLEANS, LA--I don't know a single person who thinks the federal income tax system doesn't need an overhaul. Finding any two people to agree on how is a problem. Last year about this time, American statesmen Alan Simpson and Eskine Bowles released the results of a working committee responsible for reducing the federal government's deficit and fixing the tax code. Both issues need addressing and are inextricably linked. The Bowles-Simpson proposal includes various options that would "impose different changes on the tax side of the fiscal equation," according to the Brookings Institution, a Washington-based research center. The more significant of the proposals, the Zero Plan, eliminates all tax expenditures (deductions) except for childcare credits, earned income tax credit, mortgage interest deductions and a few other legacy deductions. The plan would also eliminate the Alternative Minimum Tax and reduce the tax rate on individual filers to a maximum of 24 percent. Two other initiatives within the plan would tax capital gains and dividends as ordinary income and increase the cap on Social Security wages 2 percent each year until the maximum taxable wage is $140,000 in 2015. Their bipartisan work was important, thought provoking and showed it will take a serious effort to impact the almost impossible to imagine national debt we have hanging over our future. Unfortunately, their work is collecting dust on a shelf in Washington, D.C. I wonder when things will get bad enough for the nation's political leaders to actually read the report and consider adopting all or part of the recommendations. Our national debt stands near $15 trillion and growing, and the federal tax code is onerous. That's not news to anyone who pays attention. This past summer everything in Washington stopped while Congress and the president argued over how big the national debt should be and how we might go about getting the debt under control. Congress passed a stop-gap measure to allow more debt and deferred the problem of fiscal responsibility to a select joint committee. Of course, the committee was unable to do anything but defer the hard work. Amazingly, it's as if the Bowles-Simpson deficit reduction plan never happened. The nation watched as our leaders wrangled back and forth about entitlements, budget caps and cuts, and whether to punish high wage earners. All the while, billionaire investor Warren Buffet was telling anyone who would listen that he doesn't pay enough income tax. I don't think anyone would think poorly of Buffet if he wants to send the IRS a big check. It's his prerogative and a grateful nation would sing his praises. But that's not going to happen, and we still don't have a plan to solve our fiscal problems. Everyone seems to be on board with the notion of some tax reform, but building a consensus to get the job done isn't happening. President Obama could have addressed the nation and endorsed the Bowles-Simpson plan. He did not. The Republican candidates for president could still endorse the plan, but none have. What we've seen from the national politicians are silly, simplistic and partisan plans that won't work. It's really sad when they treat this national tragedy with so little respect. This work from the Bowles-Simpson commission is not perfect, but it did have enough support from within the commission to get published. The recommendations make sense. Taking our existing tax code and removing the cobbled together deductions and special benefits seems like such a simple thing to do. I wonder why the good men and women in Congress don't get it. I wonder why the Congressional delegation from Louisiana isn't in lockstep agreement with Bowles and Simpson. I wonder why Secretary of the Treasury Timothy Geithner isn't marching up and down the halls of Washington screaming for its passage. And lastly, I wonder why the president of the United States hasn't endorsed the plan his commission produced. There are two scenarios, neither very encouraging. The first is these people don't understand the problem or the solution. The second is they just don't care. Our job is to decide which case is worse for us and our nation's economy. Entire contents copyrighted © 2011 by The Dolan Company. Published: Thu, Dec 29, 2011