Supercommittee Didn’t Accomplish Anything Super
December 06, 2011
When Congress established a Supercommittee with the passage of the Budget Control Act of 2011 in early August, there seemed to be endless time and good will. Fast forward a month later, and both sides of the aisle remained entrenched in their positions. In the few meetings since the supercommittee began its work of finding nearly $2 trillion in cuts to the federal budget details of their work remained scant. In addition, it appeared that the clock was running out faster than expected.
The supercommittee was charged with examining any and all options in reaching the desired level of cuts. But, the massive task of overhauling our burdensome and out of date tax code appears to have taken much longer than the supercommittee’s life span. In a recent RollCall Article, the paper tracked just how long the last major tax over haul took – 1,001 days from start to finish in 1986, when Ronald Reagan was President.
President Reagan began the call for tax reform in his January 1984 State of the Union address. This was then followed by a Treasury Department study in November 1984, a proposal sent to Capitol Hill in May 1985, House passage in December 1985, Senate passage in June 1986, passage of the conference report in September 1986 and Reagan’s signature on Oct. 22, 1986.
Then, the tax-writing committees in both the House and Senate held more than 30 days of hearings on the legislation. The life span of the debt panel, from August 11th, when the committee’s final members were selected, to November23, the statutory deadline for the committee to report its bill, is 104 days —about one-tenth the length of the 1986 process.
While it is laudable that the supercommittee examined a similar overhaul, the time span alone is more than the committee could handle. Add in apresidential election, and two parties not looking to give the other a victory, and it looks as though the system was to remain how it is. However, there is an easier option awaiting Congress’ consideration – The Fair Tax.
The Fair Tax would replace all federal taxes on personal and corporate income with a single broad national consumption tax on retail sales. This would apply a tax once at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or “pre-bate”, of tax on purchases up to the poverty level. First introduced into Congress in1999, a number of congressional committees have heard testimony on the bill; however, it has not moved from committee and has yet to have any effect on the tax system.
Perhaps it’s time for Congress to dust off this bill and simplify our tax code by replacing our current byzantine system. CapitolWatch has long supported the idea of a Flat Tax, which would tax all incomes at the same rate, creating parity throughout the tax brackets. Our economy cannot continue to operate with the system we have now and expect real growth. It’s time for a simpler fairer system that all Americans can understand.