July 30, 1998

United States Senate
713 Senate Hart Office Building
Washington, DC 20510

Dear Senator:

Citizens for Tax Justice opposes any legislation that would dispose of the current federal tax code without replacing it with a fair, well-designed, alternative. We commend your vote opposing Senator Hutchinson's amendment to the IRS funding bill that would have put such a sunset provision in place.

Reform of the tax system is a high priority for Citizens for Tax Justice, many members of Congress and the American people. Abolishing the current tax code and setting a deadline for a future Congress to replace it is not, however, conducive to well-informed, well-considered tax policy. More likely, such an approach would lead to a special-interest feeding frenzy with little chance for the public to be informed and involved in the tax reform process.

In addition, abolishing the tax code would have a devastating impact on the nation's economic life. "Sunsetting" the tax code simultaneously upsets all of the expectations of every American taxpayer -- individual and corporate -- regarding the tax consequences of economic decisions.

American families make important decisions every day -- purchasing homes, saving for retirement, buying government bonds -- that are profoundly affected by the tax system. With no tax law in place, it would be impossible to make these decisions on a rational basis.

Without the capability of projecting an after-tax return, corporations would face a similar "guessing game" in making investment decisions. In addition, our nation's churches and other charitable institutions would face a tremendous challenge in raising funds and planning without knowing their future tax status.

State and local governments refer to, and rely heavily on, the federal tax code in their own tax law and administration. Their tax and budget decisions would be hopelessly disrupted.

In short, by prospectively abolishing the tax code, Congress would be compelling Americans to make their financial decisions in the dark -- an unwise and unfair economic policy.

Furthermore, an artificial tax reform deadline imposed on a future Congress puts the process in the hands of special interests. Through campaign contributions special interests can influence who would write the new tax code. Rewriting the tax code under a deadline is ideal for lobbyists trying to get their special breaks in before they become public knowledge.

It is indisputable that our tax system requires reform. Simplicity, fairness and adequacy should be the hallmarks of such reform. Abolishing the tax code is not, however, the right first step. Thank you for opposing irrational, irresponsible legislation which would only thwart the making of well-thought-out, productive, improvements in our nation's tax system.

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