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January 19, 2005
Major Tax Reform Not Likely
William "Denny" Dennis, Senior Research Fellow with the NFIB Research Foundation, was one of the keynote speakers at the USASBE conference this past weekend. He has been working in Washington on behalf of small businesses and entrepreneurs for the past three decades.
In his remarks he said that he believes that any kind of flat income tax or major reform is "off the table." He sees some hope for simplification in some areas, but the structure of the commission looking into tax reform is made up more of politicians than the kind of policy folks that could rely create fundamental change in the tax system.
The Washington Times reported last week on the make up of the commission.
"The bipartisan commission includes William Eldridge Frenzel, a former Republican congressman from Minnesota who served on the tax-writing Ways and Means Committee; Elizabeth Garrett, a law professor at the University of Southern California and former legislative director and tax and budget counsel to former Democratic Sen. David L. Boren of Oklahoma; Edward P. Lazear, a Stanford economics professor and senior fellow of the conservative Hoover Institution; and Timothy J. Muris, a former chairman of the Federal Trade Commission under Mr. Bush."
The Washington Times echoed Mr. Dennis's pessimism on the likelihood of major tax reform.
"Mr. Bush has said that he would like to preserve mortgage deductions and charitable deductions in the tax code, popular provisions that would not be included in a pure flat tax or national sales tax. On Thursday, Mr. Bush signed legislation that allows those who donate money this month to the victims of the Indian Ocean tsunami to deduct those contributions on their 2004 tax returns."
This was disappointing news to say the least. The President is not even inaugurated for his second term and our window for opportunity for meaningful tax reform seems to be already fading fast.
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One bit of good news that Mr. Dennis shared was that regulatory flexibility legislation at the state level still has strong momentum and should be enacted in several additional states this year. He did raise some concern, however, as he has begun to see editorials in major papers begin to question why small business should be given any breaks on laws and regulations. So, this battle may not yet be won.
Posted January 19, 2005 05:55 AM
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Tracked on January 19, 2005 09:30 AM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
