Bush tax cut debate dooms deal to cut deficit

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The debate has played out even as lawmakers, presidential candidates and interest groups from across the political spectrum have called on Congress to simplify the tax code. The two tax-writing committees in Congress, the Ways and Means Committee in the House and the Finance Committee in the Senate, have held numerous hearings on tax reform. Their respective chairmen, Camp and Sen. Max Baucus, D-Mont., both served on the supercommittee.

But tax reform won’t happen until Congress resolves the dispute over the Bush tax cuts, said Howard Gleckman, a fellow at the Urban Institute and editor of the blog TaxVox.

“You can’t do tax reform unless you agree in advance how much revenue you want to raise,” Gleckman said. “The problem is, there is simply no consensus at all on what the revenue goal is.”

Tax reform is already a hot topic among Republican presidential hopefuls. Businessman Herman Cain has gotten a lot of attention for his 9-9-9 plan, which would impose a 9 percent national sales tax, a 9 percent income tax and a 9 percent business tax.

The election could go a long way toward deciding the fate of tax reform. Until then, don’t look for any movement on the issue, said Dean Zerbe, former tax counsel to the Senate Finance Committee and now national managing director of Alliantgroup, a tax consulting firm.

“‘For this Congress, you might as well send the lilies for tax reform,” Zerbe said. “We will not do anything significant on taxes until after the election, and even after that it may take a while.”

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