Charles Krauthammer […] writes that the “most scurrilous” criticism of House Budget Committee Chairman Paul Ryan’s fiscal plan is that it would cut taxes for the rich. This would, he says, be akin to making the same claim against the Ronald Reagan-Bill Bradley 1986 tax reform. Krauthammer goes on to assert that Ryan’s plan is “classic tax reform” that … broadens the base by eliminating loopholes. The facts are otherwise. The Ryan plan, at least what we know of it, would inarguably cut taxes for the rich. It in no way resembles the 1980s tax reforms of either President Reagan or Senator Bill Bradley and Representative Dick Gephardt. And it most assuredly fails to eliminate loopholes. [TaxVox, WaPo]
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Tim Geithner: Cutting IRS Budget Hurts Taxpayers
FYI to any members of Congress who still think it’s a good idea:
Treasury Secretary Timothy Geithner on Wednesday said potential cuts to the Internal Revenue Service budget would damage the agency’s ability to collect revenues. “Any substantial cuts to the IRS budget will hurt revenue collection and service to taxpayers, resulting in unanswered phone calls and letters,” Geithner said in the text of remarks prepared for a House Appropriations subcommittee hearing.
Never mind the fact that taxpayers are getting a lot of bang for their buck:
“The customer service and enforcement programs at the IRS provide one of the best values in the federal government,” Geithner said.
What else do you need to know?
Geithner: Cuts To IRS Budget Would Hurt Revenue Collection [Dow Jones]
Who’s Afraid of Tax Reform?
The last time I saw the family dentist while I was in college, he asked me what I was studying. When I told him I was studying tax accounting, he got a strange, smug look on his face and asked, “what are you going to do when there is a flat tax?”
It’s been almost 30 years since I saw that dentist, and so far I’ve dodged the flat tax bullet. There has been one big tax reform since I started public accounting, and next to getting fired by good old Price Waterhouse, The Tax Reform of 1986 has been the best thing that happened to my career.
The 1986 Tax Reform Act’s 25th anniversary is tomorrow. With talk of radical tax reform in the air, from Herman Cain’s 9-9-9 plan to Rick Perry’s embrace of an old-fashioned flat tax, young tax nerds may lose sleep worrying that this time tax careers really will be legislated out of existence.
Go back to bed. For young tax nerds, radical change can be a huge career boost.
The 1986 tax reforms were enacted during my third year out of school. The local office of my national firm was going to put on a big client seminar, and I was put in charge of organizing the presentation. In the pre-Internet days, we got one paperback copy of the legislation, which I tore apart at the bindings so the presenters could have their part of the law. I proofread the slides, sent them to the photographer, and then manually arranged the presentation in the slide carousel (there was no PowerPoint, kids).
The seminar came off well (I did passive losses), which helped keep me (and the evil manager who didn’t like me) from getting me fired again. But in the following weeks the real benefit began to dawn on me — thanks to tax reform, I suddenly knew more about most of the tax law than everybody in the office who outranked me — including the evil manager. It got me promoted quickly, and it gave me much-needed credibility a few years later when a bunch of us went over the wall to start a new firm.
If there is radical tax reform, it will trash a lot of accumulated tax trivia knowledge that experienced tax nerds trade on. But it will also create huge opportunities for young, smart nerds who are willing to learn the new rules. It will be a great leveller in the profession, and a huge advantage to the young and strong.
But it will probably make it almost impossible for me to sell my collection of 1986 Tax Act books for a good price on e-Bay.