Congress debates abolishing the tax code.
As congress ready to retire the existing tax code? While some lawmakers are more than ready to do so, don't expect such a sweeping change any time soon.
The recent passage of House bill H.R. 3097, which would abolish the current tax code by January 1, 2002, is seen by many Capitol Hill observers as a purely symbolic act designed to put tax reform front and center during the next presidential election. Along with reforming the IRS, simplifying the existing tax code is a popular issue with voters, especially business owners. It's also one that Republicans intend to make a major campaign theme.
The measure, which passed by a vote of 219 to 209, was sponsored by Rep. Steve Largent (R-OK). While it has the support of some lawmakers, a number of moderate Republicans joined Democrats in opposing the measure. Although the bill directs Congress to enact a new tax system by July 4, 2002, it doesn't specify which new tax system Congress should adopt.
There's the rub, say critics. "It's important to come up with a viable alternative with some safeguards so that [tax] revenues won't plummet," says Thomas P. Ochsenschlager, a partner in the Office of Federal Tax Services of accounting firm Grant Thornton LLP in Washington, DC. Even Sen. William V. Roth Jr. (R-DE), chairman of the Senate Committee on Finance and a sponsor of the IRS reform bill, questioned the legislation, saying he had serious concerns about retiring the current tax code without an alternative in place.
The bill faces considerable opposition in the Senate as well as from the White House. Says Ochsenschlager: "Clinton would never sign such a bill, and if he vetoes it, Congress would not have enough votes to override."
As congressional and presidential campaigns begin to heat up, however, expect to hear from the candidates of both parties about how to best reform the current tax code.