Monday, November 21, 2005

The Age of Aquarius v. The Shadow

Via Tax Analysts, we learn that Bill Frenzel, a member of the President's Advisory Panel on Federal Tax Reform, is pissed that the Panel had to comply with the federal sunshine law. As explained by Tax Analysts:
The Federal Advisory Committee Act (FACA) requires that full committee hearings be open to the public and that documents made available to committee members for hearings be available to the public and press. The nine-member tax reform panel met publicly more than a dozen times since Bush named its members in January. The members also met in small group sessions that were permitted to be private because only four or fewer members -- not a quorum -- were present. Documents from meetings with less than a quorum of members are not required to be made public under FACA. Attempts by reporters to open the subgroup meetings and view documents prepared for the subgroup meetings were rejected.
Frenzel is apparently well acquainted with the success of blue ribbon task forces, having served on the President's Commission to Strengthen Social Security. He is a former Republican congressman from Minnesota now resident at the Brookings Institution.

The reason that the Tax Reform Panel's recommendations will go nowhere other than in footnotes to research papers has nothing to do with secrecy or the lack thereof. It's because the Panel's recommendations were DOA due to the constraints imposed by their charter. In essence, the Panel had to accept the premise that the skewed Bush tax cuts were acceptable and the total overall level of taxation was appropriate. Thus, it could not engage in a no-holds-barred examination of the tax system.

The failures of that system are not primarily due to the complexity of the Internal Revenue Code. They are due to the fact that the tax system, as a whole, is not terribly progressive (in many respects is actually flat) and puts an undue burden on middle-class families. In order to address the problems of the tax system constructively, all aspects of our tax system, including Social Security, the estate and gift tax, and aspects of state and local tax, have to be considered together with the federal income tax. A piecemeal approach is simply a dodge, since it allows panels such as the late, unlamented, Tax Reform Panel, to pretend that they're acting to preserve tax progressivity. In fact, at best, they are attempting to preserve tax progressivity in only one component part of the entire system.

Eugene McCarthy used to say, "The function of liberal Republicans is to shoot the wounded after battle." In that regard, there's one good thing to come out of the Panel. Frenzel said, “That’s the fourth commission I’ve taken and I shall take no more.”

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