US takes on daunting tax reform

WASHINGTON A high-level panel appointed by President George W.Bush yesterday recommended the first wholesale revisions to the Byzantine US tax code in two decades to encourage savings and economic growth.

The panel’s report said that without comprehensive reform, the tax system would only grow more bewildering and penalise millions of Americans who now fail to benefit from the complex array of benefits available to them. The recommendations could give Bush the opportunity to refocus attention on his economic agenda as he battles a daunting array of domestic headaches that are undermining his second term in office.Taking receipt of the final report of the nine-member tax panel, Treasury Secretary John Snow said: “You’ve given us the foundation for far-reaching changes in the code.”Calling for broad support in Congress for tax reform, Snow pledged to turn the proposals into recommendations for Bush “that ultimately can serve the American taxpayers and the American people well”.The US tax code appears ripe for reform.Over the years, it has grown into a monster that at 1,4 million words, is nearly twice as long as the King James Bible or the complete works of Shakespeare.According to estimates from the Internal Revenue Service, there were 1,2 million professional tax experts in the United States in 1999 – more than double the number of police officers.Outlining what would be the first big overhaul of the US tax system since 1986, the panel chaired by Republican Representative Connie Mack admitted that some of its proposals could prove controversial.But it warned that “without large-scale changes and continued commitment to avoiding complexity and special tax breaks, the tax code will become even more confusing, unfair and damaging to our economy”.Detailing ways in which its plan would promote savings in a debt-ridden society while also boosting growth, the panel said: “These benefits will follow only from a fundamental reform of the tax code.”After 10 months of debate, the panel shied away from two intensely contentious reforms that were under discussion – introducing a European-style value-added tax or a federal retail sales tax.To the relief of many taxpayers, the panel’s recommendations call for repealing the alternative minimum tax, or AMT, a late-1960s addition to the tax code originally meant to target a handful of extremely wealthy Americans.But the AMT has since grown into a scourge of the middle classes.- Nampa-AFPThe recommendations could give Bush the opportunity to refocus attention on his economic agenda as he battles a daunting array of domestic headaches that are undermining his second term in office.Taking receipt of the final report of the nine-member tax panel, Treasury Secretary John Snow said: “You’ve given us the foundation for far-reaching changes in the code.”Calling for broad support in Congress for tax reform, Snow pledged to turn the proposals into recommendations for Bush “that ultimately can serve the American taxpayers and the American people well”.The US tax code appears ripe for reform.Over the years, it has grown into a monster that at 1,4 million words, is nearly twice as long as the King James Bible or the complete works of Shakespeare.According to estimates from the Internal Revenue Service, there were 1,2 million professional tax experts in the United States in 1999 – more than double the number of police officers.Outlining what would be the first big overhaul of the US tax system since 1986, the panel chaired by Republican Representative Connie Mack admitted that some of its proposals could prove controversial.But it warned that “without large-scale changes and continued commitment to avoiding complexity and special tax breaks, the tax code will become even more confusing, unfair and damaging to our economy”.Detailing ways in which its plan would promote savings in a debt-ridden society while also boosting growth, the panel said: “These benefits will follow only from a fundamental reform of the tax code.”After 10 months of debate, the panel shied away from two intensely contentious reforms that were under discussion – introducing a European-style value-added tax or a federal retail sales tax.To the relief of many taxpayers, the panel’s recommendations call for repealing the alternative minimum tax, or AMT, a late-1960s addition to the tax code originally meant to target a handful of extremely wealthy Americans.But the AMT has since grown into a scourge of the middle classes.- Nampa-AFP