January 9, 2007
John Fund: Beware the Appropriations Party
Reform Should Focus on Savings and Investment
Media contact: Brian Phillips (202) 464-5102
Washington, D.C.— The new Congress should reform the tax code to make it easier for Americans to save and invest as they plan for the future, according to Wall Street Journal Editorial Page Board Member John Fund.
"I realize that we're not going to have an overall, comprehensive reform in which we replace the current income tax system with a consumption tax or something like that," he said. "But we can do more and go further down the road of reducing the taxes on savings and investment."
Fund discussed tax reform and the new Congress in the Tax Foundation's most recent Tax Policy Podcast.
He criticized Republicans for passing the buck on earmark reform, but said he was skeptical about Democrats' promises to clean up the appropriations process.
The Democrats talk a good game but the devil will be in the details," he said. "I'm told what they really want to do is go back to the old pre-earmark system where you send letters to the bureaucracy saying you know, it really would be helpful if you moved this money from Column A to Column B and, after all, we are the majority party and we do have control over your purse strings. That would be the implied message."
He called the current tax system "irredeemably broken" and blamed what he called the "Appropriations Party" for reversing the major reforms of 1986.
Since 1986, "we've had 15,000 changes in the tax code. The tax code is even more bulky and out of control than ever," he said.
"Now, we probably can't go nearly as far as 1986 but I think there are going to be some Democrats who recognize that in the long run the real tension in their party is going to be between the people who want to just, you know, have a bidding war with K Street lobbyists for changes and favors in the tax code and those Democrats who recognize that the way to have economic growth, which means more money for social programs, is to streamline and simplify the tax code."
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