When Congress returns to work in 2014 there will be calls for more reforms during this upcoming election year, including for Immigration reform, Affordable Health Care (Obamacare) reform, deficit reduction reform…and quite possibly even tax reform. As members make their resolutions, let us ask for clarity.
The word resolution means a firm decision either TO DO something or NOT to do something. If you ask any member of Congress if we need tax reform, the answer is “yes.” If you ask them where he or she suggests we begin, that is where the need for clarity comes in. For some, their resolution may be to take no action at this time. That is not the right answer when we have new ideas on the table like ASSET proposes.
When it comes to tax reform, no matter which side of the equation you are on, there have always been decries of inequality in the tax system. In Forbes in 2012 writer Julian Block notes that President Andrew Jackson once proclaimed “a resigned view of all taxes. “The wisdom of man never yet contrived a system of taxation that operates with perfect equality.””
On the other side of the issue of taxation President Teddy Roosevelt once said in a 1910 speech that: “I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”
The debate has not changed. Rates and exemption levels for the estate tax continue to be the basis of disagreement. We can change the debate with new proposals like ASSET to collect the revenue produced by the estate tax another way, but still targeting the same taxpayers.
There are signs of life in the estate tax reform discussion, despite the fact the House has not held a vote on full repeal. Even with a vote of the entire Senate in March 2013 more than 80 Senators (including 35 Democrats) voted for a revenue neutral way to repeal or reduce the estate tax. That makes sense when you consider the jobs that are potentially displaced by forcing cash poor, but asset rich private businesses and farms into selling the very tools that create their livelihoods in order to minimize taxes.
When Congress returns for the second half of the 113th Congress on January 7th they will no doubt be full of resolutions. Will the resolutions include taking action on tax reform?