All of the media attention over the deficit commission recommendations and the tax debate happening this month in Washington has initiated a fair amount of discussion about the possibilities for fundamental tax reform. The Washington Post had two editorials on the subject over the weekend, followed by an article this week in the Wall Street Journal.
In a New York Times op-ed, David Brooks encouraged the President to make tax reform a priority, beginning with the upcoming State of the Union address. While there are plenty of naysayers, Tax Analysts' Joe Thorndike makes the case for tackling the deficit and tax reform together.
But a big bump in the road ahead is Grover Norquist. You'd think his group called Americans for Tax Reform would actually be in favor of... well, tax reform. Their anti-tax bias is so fanatical, however, that they refuse to support any plan that raises revenue, even if it makes the tax code drastically simpler and more efficient. Specifically, while Norquist concedes that many tax expenditures (a tax break aimed at a particular industry or objective) are "horrible tax policy," he refuses to support eliminating them unless lawmakers promise not to use any of the money for deficit reduction. Instead, Norquist insists that the revenue produced from eliminating tax expenditures must entirely be used to lower tax rates.
Simply put, Norquist's first, second, and third priorities are lower taxes — deficit reduction and tax reform be damned. That's why Len Burman suggested renaming Norquist's group, Americans Against Tax Reform. One could argue that "Americans Against Taxes" would be even more fitting.
Lawmakers who are serious about addressing the budget problems and reforming the tax system would put everything on the table and turn off the noise from Norquist. Real tax reform would mean some winners and some losers. The end result would be a fairer, simpler tax code that raises enough money to pay for public services and promotes economic prosperity for all Americans. (Read more on CTJ's recommendations for reform.)