Taxcode Revamping our tax code is a pretty popular notion these days. It might also be next to impossible.

NPR took an interesting look at the concept recently. In it, reporter Scott Horsley said an initiative as big as tax reform requires bipartisan support. For proof, he spoke with former Sen. Bill Bradley, D-NJ, about the last time the tax code was overhauled, in 1986.

“'If you're going to do a deal on a bipartisan basis, you have to have something in the deal that Democrats want. In ’86 that was getting rid of loopholes,' said Bradley. 'And you have to have something that Republicans want, which in '86 was lowering the top tax rate.'

“Even now,” Horsley reports, “many economists on the left and the right say that's the best way to design a tax system — with few loopholes and relatively low tax rates. But the streamlined code Bradley and his colleagues cooked up didn't last. Since 1986, more than 15,000 changes have been made to the tax code. And the instruction book for the 1040 form has more than tripled in length.”

The problem today might be the political environment; it's so toxic that there likely will be little, if any, bipartisan support for any tax reform agenda.

“There is no solution out there right now that anyone would call politically feasible,” William Gale of the Tax Policy Center told Horsley. “That's not a criticism of the solutions. That's a criticism of the mind-set of the public and the politicians.”

And yet the push for reform marches on. In a white paper titled Tax Reform Alternatives for the 21st Century, the AICPA says any meaningful tax reform must take into account the following issues:

  • The financial impact that the coming wave of baby boomer retirements will have on our economy.
  • The expiration of the 2001 and 2003 Bush tax cuts.
  • The increasingly unfair impact of the AMT on America's middle class.
  • The recession's negative impact on federal tax revenue.

That second point — the fate of the Bush tax cuts — has been the source of considerable debate recently, but against all odds, there's the faintest hint of bipartisanship in the air on the issue.

In an election year, how long do you thing that will last?

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