- The Washington Times - Sunday, September 12, 2004

In his Sept. 2 Republican Convention speech, President Bush said one of his key second-term goals is creating a simpler, fairer, pro-growth tax system.

In a White House fact sheet, he said he would issue an executive order creating a bipartisan panel that will report to the treasury secretary early next year on tax reform options.

As a long-time tax-reform supporter, I am reluctant to throw cold water on this effort but am pessimistic it will accomplish anything meaningful.

First, the record of such commissions is not good. I have a whole shelf of reports from various presidential, congressional and high-level private commissions that were just a waste of time for everyone involved.

In my experience, commissions of this sort are mostly useless unless those appointing them already know what they want them to report. If a president doesn’t know what he wants for tax reform, it is unlikely a commission will tell him — especially if members of both parties are involved.

Commissions may serve some value as marketing tools if a president is looking to build support for something he has already decided to do. But the value is so small it is probably not worth the effort.

In any case, commissions only work if members have a gun to their heads and must agree lest something terrible happen: The 1983 Social Security Commission chaired by Alan Greenspan is the only one I can think of that was ever really “successful.”

I think President Bush would have been better advised to just ask the Treasury Department for a report, as Ronald Reagan did in 1984. Treasury staff is well aware of every serious tax reform option ever put forward and is fully capable of giving Mr. Bush what he wants within the time he specified.

By contrast, it will take at least a year for a bipartisan commission to get up to speed, hire staff, hold hearings, deliberate and write a report. Most likely the Republicans will all end up endorsing something like a flat-rate consumption-based tax system, and all the Democrats will decry it as a giveaway to the rich that will oppress the poor. What is the point?

If Mr. Bush wants a flat-rate consumption tax, for which he has voiced support many times in the past, he should just say so and ask Treasury to draft one. It laid the groundwork almost 30 years ago in its famous Blueprints study, the foundation upon which virtually all serious tax reforms since have been built.

If Mr. Bush knows what he wants, it is not only a cop-out to appoint a commission, it is dangerous. It is very hard to find members for such a commission who are politically reliable and have both the credibility and the expertise needed. Of course, if he could find the appropriate people, it could conceivably boost his efforts. But, like I said, that’s really hard.

It’s not impossible to find Democrats and liberals who generally support what Mr. Bush presumably wants to accomplish. For example, he could appoint former Arizona Sen. Dennis DeConcini, former California Rep. (and former Office of Management and Budget Director and White House Chief of Staff) Leon Panetta, or former California Gov. (and current Oakland Mayor) Jerry Brown. In the past, they have all endorsed proposals along the lines of a flat-rate consumption tax.

Personally, I would recommend against appointing any politicians. In the current political climate, they will be under too much pressure to repudiate what the other side supports, even if they might agree with it. So, I would limit commission membership to academics from universities and think tanks.

Of course, there is no guarantee such people will not become politicized. But I think there is a core of economists on both sides who are mutually respected and conceivably could agree on something doable.

At the risk of destroying their chances or mischaracterizing their political loyalties, I would suggest the following Democrats/liberals: Bill Gale, Brookings Institution; Eugene Steuerle, Urban Institute; Alan Auerbach, University of California-Berkeley; Joel Slemrod, University of Michigan; and Robert Hall, Stanford University.

On the Republican/conservative side, I would look at David Bradford, Princeton University; Kevin Hassett, American Enterprise Institute; R. Glenn Hubbard, Columbia; Michael Boskin, Stanford University; and Martin Feldstein of Harvard.

I think a commission of such people could come up with something worth doing and make it a valuable exercise.

Bruce Bartlett is senior fellow with the National Center for Policy Analysis and a nationally syndicated columnist.

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