Those of you who have read my posts over the years will not be surprised to hear that I enjoy Charles Krauthammer's columns. Charles is articulate, writes with percision and skill and is more often than others to be right on the issues. His columns appear in the Washinton Post and he is a Fox News Contributor on television.
Last week Charles presented a scenario for success in the Super committee on debt that is attractive. He proposes that the objectives of the committee can be achieved if they approach the issues in three distinct steps.
First is the tax reform issue. The total revision of the tax code could be approached by this committee with bi-partisan support. The simplification of the tax code could provide elimination of special interest provisions (loopholes) favored by the left while lowering rates for the right. The changes appeal to both sides but can remain revenue neutral. The new tax code would be permanent, addressing the consistency and predictability needs of business. The system could be both fair and less costly to comply.
Second, the changes resulting in a simpler system will permit deep cuts in deductions that offend the senses for fairness and simplicity. The one major deduction Charles recommends keeping is the charitable contribution provisions - leaving the way open to transfer some of the safety net entitlements to the private sector in the future.
Third, the remaining tasks for actual spending cuts could then be addressed with transparency with the left giving on entitlement reform while the right gives on tax rates. The tax simplification work would produce sigmificantly lower rates. The possible increases of rates in later negotiation could still result in lower rates than current.
It is the total replacement of the tax structure with a system that is more efficient, more fair and significantly more simple and transparent that is the key to the ability to move forward with bi-partisan cooperation to achieving real goals in spending cuts. With much of the structural layout and the options available already existing in the Simpson-Bowles Commission reports (bi-partisan commission), the current committee can build upon existing recommendations in the short time period available.
Read the Krauthammer article in full at the Washington Post. <link>
It is reassuring that Charles sees a way out of current gridlock with a phased, sequenced approach. The adoption of The Fair Tax or similar proposal is the key to unlocking the gridlock and moving forward with a real debt reduction plan that may be acceptable to both sides of today's gridlock.
Well put, Charles.
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