These days we hear gloomy statements that no significant reforms can be accomplished by a lame-duck president in his sixth year in office with a partisan, divided House and Senate, in an election year.
Fortunately, there are a few goals both sides agree upon: We need to boost our underperforming economy, thereby creating more jobs. One solution should also be crystal clear: It’s time for a complete overhaul of our complicated, costly tax code.
It’s instructive to reflect on the United States’ last major successful tax simplification effort, the Tax Reform Act of 1986. President Reagan was in his sixth year as president, Republicans controlled the Senate and Democrats ruled the House.
It didn’t seem like an ideal time, but leadership in Washington joined together to improve opportunities for Americans by creating a simpler, fairer and more competitive tax code.
The United States experienced strong economic growth and prosperity in part as a result of a lower corporate-tax rate that allowed the nation to become more economically competitive with Western Europe and Japan.
A simplified, fairer code also made it easier for taxpayers and businesses to comply, reducing administrative costs and boosting confidence in the fairness of tax laws envisioned by Reagan.
Through the past 28 years, the U.S. tax system has been made more time consuming, confusing and onerous. The need for new, pro-growth comprehensive tax reform is greater now than in 1986.
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