November 3, 2005
President Bush’s tax reform commission is off to a good start. It has delivered a report calling for a reduction in the number of tax brackets from six to four, eliminating the awful alternative minimum tax, reducing the corporate tax rate and making permanent the now temporary fifteen percent tax on capital gains and the tax on dividends.< /p>
The reformers would reduce the paperwork considerably and possibly to the size of a post card. Mortgage interest rate deductions would be sharply reduced, mostly to help offset relief from elimination of the alternative minimum tax.
The Wall Street Journal says the big disappointment is that tax rates would remain close to what they are now and thus fall short of where President Reagan got us in 1986, with just two rates of 15 percent and 28 percent. The reformers plan has four rates and keeps the highest and most economically damaging rate at 35 percent.
History has shown that low rates mean higher revenue for the government. This plan is a start, but it shouldn’t be the finish. For what we should have, read Steve Forbes’ excellent new book, “flat tax revolution.”
I’m Cal Thomas in Washington.