With looming deficits and heightened political stakes, the search for politically-palatable solutions in Washington can be a continually vexing process. Despite this difficulty, tax reform is one area in which the path to compromise is fairly clear, as a new report from the Congressional Research Service (CRS) highlights.
The report compares the specifics of the BPC Task Force’s Restoring America’s Future with the Bowles-Simpson proposal from the president’s fiscal commission. Both plans, the report notes, encourage Congress to implement substantive tax reform through the elimination of most tax expenditures.
This broadening of the base would generate sufficient revenue to allow individual and corporate marginal tax rates to be reduced. Lower rates will improve the efficiency of the tax system, and simultaneously spur economic growth. While there are several important differences between Restoring America’s Future and the Bowles-Simpson framework, both take the same general approach to tax reform.
The release of the CRS report sends a positive signal to those in Washington hoping for meaningful reform, as it both highlights the flaws in the tax code and presents policymakers with the responsible foundations to begin constructing a more efficient and equitable tax system.