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Archive for Saturday, January 8, 2005

Panel to study tax changes

January 8, 2005

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— President Bush on Friday formally launched his effort to revamp the federal income-tax system by directing a new nine-member commission to come up with a better way to collect tax revenue.

Bush gave the panel, headed by two former senators, Republican Connie Mack of Florida and Democrat John Breaux of Louisiana, a July 31 deadline to propose changes that would simplify the tax code and "promote long-term economic growth and job creation." Commission members said the president gave them wide latitude to consider sweeping changes, including the possibility of a national sales tax or a flat tax that would impose the same tax rate on all income levels.

Other possible changes to the system include reducing the number of tax brackets, reducing taxes on investment profits and interest income, and making it easier for businesses to write off some of their expenditures.

Any attempt to change tax laws is sure to energize a wide range of special interests. The commission's reporting date means that lawmakers probably will not deal with the issue until 2006, against the backdrop of congressional elections that year.

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