The March 30 Wall Street Journal reported that a U.S. Senate Finance Committee bipartisan working group is “giving new consideration to the consumption-tax idea [value-added tax] with the hope that its promised boost to economic growth would ease the way to a revamp” of the Internal Revenue Code.
It’s apparent these senators realize that attempts to overhaul and modernize the current tax code must be embodied in a totally new system of federal taxation — one that jettisons the current mish-mash of individualized, special-interest provisions.
Any legislative effort at so-called tax reform that tries to repeal, tweak or add new ones will only reshuffle the deck and produce a new group of winners and losers for both businesses and individual taxpayers; an unwanted consequence that will undermine tax reform.
It will also create a political firestorm on Capitol Hill that makes chances of passing a bill of this importance slim to none, and slim just left town. I know this will happen because from 1973 to 2003, I helped fuel the fires on behalf of my clients.
The VAT concept is not a new idea. Over the past several years The Post and Courier’s op-ed page has featured numerous columns on the subject by retired U.S. Sen. Fritz Hollings.
He has pretty well spelled out the need for a VAT and the positive impact it could have for all U.S. individual taxpayers and U.S. companies competing abroad.
To ensure the promises of economic growth, tax fairness and simplicity are fulfilled in any tax reform plan, we’ll need to closely examine and understand the details (where the devil lives) before it passes Congress.
However, it appears Sen. Hollings’ out-of-the-box idea is about to take wings. Just goes to prove, if you have a good idea and are persistent, things will happen even though you’re not still sitting behind one of those 100 desks.
Robert S. Reese Jr.
Colonel Vanderhorst Circle