Monday, September 5, 2011
Tax Code Reform Phase One
Maybe Congress should start tax code reform with the corporate tax code--it's more out of whack than the personal income tax code. A recent article by Reuters discussed how even in a pretty good year like 2010, some large corporations paid more to their CEOs than their federal income tax. Corporations that fare well by the current tax code would love to see it stay on the back burner. That way, companies can continue lobbying for and receiving their specific breaks while the country is distracted by other debates. Tackling the corporate tax code first is a good chance to show seriousness and test the mechanics of reform before tackling the tax code that will impact the voters more.
There maybe some drawbacks to this plan, however. We don't want the reform to kill business decision-making, especially hiring. It might be best to have a commission of the business-knowledgeable representatives figure out what is fair, then open discussion, then vote.
(An aside: I prefer commissions because they have done better work on thorny problems than the standard congressional debate and committee system. Compare the deficit commission's work, though ignored, with the mess from the healthcare reform debate.)
On the other hand, the corporate tax code is more complex. So maybe starting there is a bad idea. It might be safer to test the waters and craft compromises with the individual income tax first, building expertise and goodwill in the process (I'm an optimist, I guess). Then tackle the corporate tax code.
OK, scratch the original idea. I just hope this wasn't a total waste of your time. After all, you got a peak at my thought process.