Tax News

Tax Analysts report:

House Republican Policy Committee Chair Adam H. Putnam, R-Fla., on June 8 said he is urging GOP leaders to let the House vote for the third time to sunset the tax code.

Putnam told Tax Analysts he hopes House leaders will make time before the November elections for the Tax Code Termination Act (H.R. 4725; Doc 2006-3461 or 2006 TNT 35-32), introduced by Rep. Bob Goodlatte, R-Va. The bill would repeal the Internal Revenue Code by December 31, 2009, provided an alternative is in place by July 4, 2009.

Putnam said the debate would allow members to discuss reform proposals such as the Freedom Flat Tax Act (H.R. 1040; Doc 2005-4730 or 2005 TNT 45-43), the Simplified USA Tax (SUSAT) Act of 2006 (H.R. 4707; Doc 2006-2458 or 2006 TNT 26-37), and the Fair Tax Act of 2005 (H.R. 25; Doc 2005-3538 or 2005 TNT 38-83), a national retail sales tax proposal. According to H.R. 4725, the new tax system should be simple and fair, feature a low rate for all Americans, provide tax relief for working Americans, protect the rights of taxpayers and reduce tax collection abuses, eliminate the bias against saving and investment; promote economic growth and job creation, and not penalize marriage or families.

With 52 House lawmakers lending support to H.R. 25, the Fair Tax Act leads the pack in the number of cosponsors. Among its supporters at press time are House Ways and Means Committee member Kevin Brady, R-Texas, and former House Majority Leader Tom DeLay, who served his last day in Congress on June 9. Goodlattes bill lists 40 cosponsors, and H.R. 1040, introduced by Rep. Michael C. Burgess, R-Texas, has 5. The SUSAT Act, offered by House taxwriter Phil English, R-Pa., has not received any cosponsors.

Ways and Means Committee ranking minority member Charles B. Rangel, D-N.Y., dismissed the newest effort to sunset the tax code.

I find the mere suggestion of this bill ironic, given that Republicans have been in power for over a decade and under their watch the tax code has grown in size and complexity, he said. Like Dr. Frankenstein before them, Republicans complain about the monstrous tax code they've created and say they wish to destroy it. We've been here before, we've had this debate, and any Republican promises to abolish the tax code are fanciful notions at best and election-year politics at its worst.

Putnam held a hearing on June 6 on tax reform in the hopes of fueling the effort to revamp the tax code. The hearing took place the same day Ways and Means Social Security Subcommittee Chair Jim McCrery, R-La., said tax reform would not move until 2009.