US Chamber of Commerce Seeks Tax Restructuring and Entitlement Reform

This month (August 2011), the U.S. Chamber of Commerce sent a letter to the Joint Select Committee on Deficit Reduction (created by the debt ceiling legislation PL 112-25, Section 401) stating that "Congress must reform entitlement programs and fundamentally restructure the U.S. tax code to bring revenue and spending back into alignment."



The Chamber doesn't provide specifics, but states that tax reform is needed "to improve efficiency, transparency, and simplicity to drive economic growth and job creation." ... and address "how the current tax laws act as an impediment to worldwide competitiveness, a deterrent to saving and investment, and an obstacle to innovation and entrepreneurship." They also suggest that reform should "lower overall marginal tax rates, to encourage saving and investment, to foster global competitiveness, increase capital accumulation, attract foreign investment, and drive job creation."



Interesting points:

• That they are calling upon this committee to restructure the tax law.
• That they are saying that spending reductions/reforms should not be just on discretionary spending (which is a relatively small category of federal spending), but should instead look at entitlement of Social Security and Medicare.
• They are starting with tax principles to help shape the reform - efficiency, transparency and simplicity. This would mean that they would support reduction and elimination of some number of special deductions, exclusions and credits. They are also calling for elimination of special rules that benefit one industry over another. They want "the marketplace, and not the tax system, to allocate resources" (neutrality and economic efficiency).
  
  

I think this is a good, bold move. The Chamber says it speaks for about 3 million businesses of all sizes. The federal tax system has become too complex, which increases compliance costs for businesses and individuals. The AMT and too many phase-outs and special rules makes it difficult for taxpayers to know the tax consequences of their activities.



But, the special committee must vote on its report by November 23, 2011 - that doesn't give them much time. Yet, there are various proposals including from President Obama's deficit commission (here), and others (I have links to most here). And there have been several hearings this year on tax reform (see list here). Entitlement reform will likely be a bigger challenge thought than tax reform. We'll see.

US Chamber of Commerce Seeks Tax Restructuring and Entitlement Reform 2011-08-24T08:47:00-07:00 Rating: 4.5 Diposkan Oleh: Unknown