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Wednesday, October 12, 2005
Tax Panel Talks Specifics at Yesterday's Meeting
The President's Advisory Panel on Tax Reform met yesterday in anticipation of their November 1 deadline for submitting tax code recommendations to the Treasury Department. In the meeting the panel referenced some loose conclusions they have come to regarding tax reform, mainly concerning the alternative minimum tax as well as deductions for homeownership and employer-provided health insurance.
While the panel still has a few weeks before they will be submitting formal recommendations (which Bush may or may not choose to consider), they have basically come to a consensus that it would be a good idea to cap both the employee income exclusion for employer provided health care as well as the mortgage interest deduction for homeowners. There was discussion of capping employer-provided health insurance at $11,000 per employee, and mortgage interest deduction at $350,000 (for a couple filing jointly). Former GOP Senator and Chairman of the Panel Connie Mack said that the deductions as they currently exist are not shared equally, and that by pursuing caps in both areas it would result in "shifting some of the benefit to middle-income Americans."
Much of the reason why the panel is interested in pursuing these reforms is because the decreased deductions would help to offset the cost of repealing the Alternative Minimum Tax (AMT), which was created to ensure that all extremely wealthy individuals would pay some taxes, but is increasingly ensnaring upper- and middle-income Americans. AMT repeal, which would cost about $11.3 trillion over ten years, was deemed to be a necessary reform by the panel months ago, however it was only at yesterday's meeting that they laid out any sort of options to offset to the cost of repeal.
At yesterday's meeting the panel also recommended expanding tax breaks for charitable donations, and rejected the idea of replacing the income tax with a sales tax or a value added tax, both of which would unnecessarily complicate the tax code while placing a disproportionate financial burden on low-income families.
The panel will meet once more publicly on October 18, and meet later in the month via teleconference before submitting their recommendations. They are slated to disband November 15.
New York Times: "Tax Panel Says Popular Breaks Should Be Cut"
Posted by Becky Lewis
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