Tax reform: deja vu all over again? Maybe yes, maybe no.

• Author: Dicker, Eli J.

To paraphrase Jefferson, a little upheaval every now and then can be a good thing. The occasional revisiting of settled ideas, challenging of old assumptions, and perhaps even installing of new concepts or a fix or two should be welcomed and even encouraged, even when the rebellion (Jefferson's actual term) relates to as complex and multifaceted a mosaic as the U.S. internal revenue laws.

Among the many sounds heard emanating from inside the Beltway (including, hisses, backfires, grunts, and perhaps even a whine or two) are the grinding gears of the government shifting into forward motion in response to the President's challenge to develop options to reform the Internal Revenue Code that both vexes and employs TEI members. The challenge to the President's Advisory Panel on Federal Tax Reform (a group of businessmen, politicians, and academics)--and ultimately to Congress--is to make our tax laws simpler and more administrable while promoting growth and competitiveness.

Originally scheduled to complete work at the end of July, the Panel is now aiming to issue its report at the end of September. As the Panel continues its efforts, both in public and increasingly in private working groups, only the brave would venture beyond generalities and predict what the group's final work product will look like or, more brashly, which (in colloquial Washington-speak) dogs will hunt or ideas will have legs. At the same time, there have been enough representations TO the Panel from myriad sources and enough public utterances and trial balloons FROM the Panel to offer up some generalities and, indeed, to try to get a jump on the jumpers by offering up thoughts (and some speculation) about what may or may not emerge.

What should we expect from the President's Advisory Panel? Recommendations for fundamental tax reform, characterized by bold, new thinking about how and what we should tax or, alternatively, a surfeit of tinkering with existing taxing regimes and patterns? Interestingly, the process in place may shed some light on this question. While the Advisory Panel is charged to develop options for consideration by the Department of the Treasury, it is the Treasury that will formulate the actual recommendations to be forwarded to the President and ultimately considered by Congress. This two-step process may well permit the Advisory Panel to give serious consideration to fundamental reform considerations without being blown off-course by political winds. At...