The polls say voters want more bipartisanship, and one possibility in 2013 is tax reform that trades lower rates for fewer loopholes. Well, so much for that. The man who wants to be the next leader of the Senate Democrats has declared that this “old-style of tax reform is obsolete.”
The antireformer is Chuck Schumer, the Senator from Wall Street, er, New York, who averred at the National Press Club last week that his party will have nothing to do with tax reform of the kind that Ronald Reagan negotiated with Democrats in 1986, or that the Simpson-Bowles deficit commission proposed in 2010, or that the Gang of Six Senators have been working on. It’s Chuck’s way or no way.
The Reagan model of reform “doesn’t fit the times because there are two new conditions that didn’t exist in 1986, but that are staring us in the face today,” Mr. Schumer said. “A much larger, more dangerous deficit, and a dramatic increase in income inequality. Old-style tax reform could make both conditions worse.”
Mr. Schumer says the only way to reform is to broaden the tax base and raise tax rates. If you’re wondering how this differs from a plain vanilla tax increase, good question. The Democrat says that all revenue from any tax loophole closing must go to “reduce the deficit, which is strangling our economic growth.”