The New York Times has an article about the Deep Thoughts on tax reform coming from the White House. Replace the national income tax with a national sales tax? A flat income tax that would exempt savings and investments? A repeat of the broaden-and-flatten effort of 1986?
Regardless, the President apparently desires some sort of (guess what?) revenue-neutral tax shift: “he wants any overhaul of the system neither to raise taxes over all nor to cut them.”
Sound familiar? If so, it’s because that’s what many environmental groups (including Sightline) have been advocating for years, albeit with a focus on green taxes rather than mean taxes, i.e., on carbon taxes and the like rather than pointlessly regressive ideas like a national sales tax.
It will be interesting to see whether Bush faces the same difficulties that advocates of green tax shifts have faced—public skepticism about revenue neutrality, plus intense private opposition from the many inevitable losers—and how he addresses them.
Win or lose, the President will be giving us a good learning experience. (PS. Since Bush has not exactly shown a commitment to revenue neutrality in the past, my guess is that he’ll lose his interest in tax shifts once he finds out how hard they are and go back to tax cuts, which are much easier because the burden falls on future generations who can’t yet vote.)