Paul L. Caron
Dean


Wednesday, September 9, 2009

More on the Volcker Tax Reform Panel

Following up on yesterday's post, Toward Tax Reform: Recommendations for President Obama's Task Force:

A task force appointed by President Obama to recommend changes to the tax code by December has held no public meetings, and the White House is not revealing with whom the group has met in private. The secrecy surrounding the group's deliberations contrasts with President Obama's pledges of greater government openness and transparency. ...

The group heard presentations from economists and tax policy experts during an August session at the National Bureau of Economic Research, organized by [Martin] Feldstein. Earlier this year, it heard from economists affiliated with the Tax Policy Center, a Washington think-tank. Task force members have spoken separately with technology CEOs, according to an industry official.

"The tax reform task force is working hard on a proposal that they will present to the President in early December. They have begun meeting with outside experts and we expect to hold public meetings in the fall," said Jen Psaki, White House deputy press secretary.

Executive Summary:

There seemed to be broad consensus that tax reform might be needed but that health care reform might be a higher priority item this year.

  • There was a difference in opinion as to whether there should be comprehensive tax reform or if certain items, such as the corporate tax code and the temporary tax breaks that must regularly be extended, should comprise the basis of the effort. In addition, some of the participants identified the tax exclusion for employer sponsored health insurance as something that could be revisited.
  • There was a discussion about the possibility of raising revenues before the economic recovery takes hold.
  • There was general consensus that the Alternative Minimum Tax (AMT) is a problem and needs to be addressed.
  • There was general consensus that the “tax gap,” the difference between what people pay and what is owed, is a problem and needs to be closed; however, there was a difference of opinion as to how easily that could be accomplished.

Attendees:

  • The session moderators were Timothy Geithner, Secretary of the Treasury, and Christina Romer, Chairwoman of the Council of Economic Advisors.
  • Members of Congress who attended: Senator Baucus, Representative Rangel, Representative Camp, Senator Snowe, Senator Carper, Senator Cornyn, Representative Velazquez, Representative McCotter, Representative Matheson, and Representative Price of North Carolina.
  • The outside attendees were: Joe Minarik (Committee for Economic Development), Fred Goldberg (Skadden Arps), Lawrence Mishel (Economic Policy Institute), Maya MacGuineas (Committee for a Responsible Federal Budget), Michael Graetz (Columbia University), Sarah Wartell (Center for American Progress), Gary Flowers (Black Leadership Forum), Janet Murguia (National Council of La Raza), Aimee Baldillo (Asian American Justice Center), William Gale (Brookings/Tax Policy Center), and John Cavanagh (Institute for Policy Studies).

The Detailed Summary: See pages 25-27 of the report.

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