A Stitch in Haste

I've blogged before about the President's Advisory Panel on Federal Tax Reform, which so far has come up with a whole lot of nothing except to make the income tax even more complicated and even more progressive. Is anyone really surprised?

Here's the good news:

President Bush's tax commission has rejected the idea of a national sales tax and has voiced strong misgivings over European-style consumption taxes, drawing complaints of timidity from critics who wanted the panel to scrap the income tax.

Contrary to uninformed claims that a revenue-neutral national sales tax would be approximately 23%, the actual rate has been calculated at 44%, and possibly as high as 82% — see my previous post.

Here's the bad news:

When it meets again Tuesday, the members will revisit the possibility of recommending a value added tax — a levy used widely in Europe that imposes a tax on increased value of a product at each stage of production and passed on to consumers.

Tax reform is one thing; tax replacement is a whole different apocalypse. As I've warned regarding the national sales tax nonsense: We would wind up going from having an income tax today, to a sales tax tomorrow, to both the day after tomorrow. All in the name of "reform."

Don't believe me?

Ed McCaffery, law professor at University of Southern California, said the panel could yet embrace tax systems that combine income and consumption taxes, a hybrid that uses the best of both ideas.

With reform like this, who needs stagnation?

(Also no definitive word yet on whether the Panel will recommend the abolition of the monstrous Alternative Minimum Tax — the one undeniably good thing that might come from all this huff-and-puff.)