An October 19 New York Times article on the two recommended proposals to be submitted November 1 by President Bush's advisory panel on federal tax reform reported that both plans were designed to maintain the current distribution of the tax burden across income levels. In fact, the Los Angeles Times reported the same day that some members of the advisory panel believe that both plans would likely shift the burden from wealthy Americans to the middle and lower classes.
The New York Times article by David E. Rosenbaum, while acknowledging that either of the plans would “amount to the most fundamental change in the American tax system in 20 years” if implemented, stated as fact that both “were designed so that the tax burdens borne by the rich, the middle class and the poor would be roughly the same as now.”
But as Joel Havemann wrote in the Los Angeles Times, “Some panel members expressed concern that either plan would make the system less progressive by shifting more of the tax burden from the wealthy to the less well-heeled.”
Havemann's story went on to quote California State Treasurer Phil Angelides, who expressed his concern that as a result of proposals to reduce the mortgage interest deduction and eliminate state and local tax deductions, “people making under $100,000 are going to be paying more.”
The commission will reportedly propose two separate tax revision plans to President Bush. Both plans will both call for significantly lowering the cap on deductions from mortgage payments, meaning many homeowners will see an increase in taxes. They would also eliminate income tax deductions for state and local taxes. The differences between the two plans lie principally in their proposals for corporate tax adjustments, but both would lower the maximum corporate tax from 35 percent to 32 percent.
The New York Times story quoted only the commission's chairman, former Sen. Connie Mack (R-FL), saying that "[w]e have focused on big-picture ideas that would improve the tax system for a large number of Americans."
From the October 19 New York Times article:
President Bush's tax advisory commission agreed on Tuesday to recommend two alternative plans, both of which would limit or eliminate almost all existing tax deductions, including those for state and local income and property taxes.
The recommendations, due to be submitted to the president by Nov. 1, were designed so that the tax burdens borne by the rich, the middle class and the poor would be roughly the same as now.
But the plans, if enacted, would amount to the most fundamental change in the American tax system in 20 years. Some individuals and businesses could owe much more in taxes than they do now, and some much less, depending on their particular circumstances. And taxpayers in some parts of the country would fare better than those elsewhere.
From the October 19 Los Angeles Times article:
Some panel members expressed concern that either plan would make the system less progressive by shifting more of the tax burden from the wealthy to the less well-heeled.
For example, Elizabeth Garrett, a USC law professor, said she was not satisfied with the current tax code's progressivity -- the degree to which taxpayers pay a higher share as their income increases -- and added that she needed to see hard data on the effect of the panel's two new plans.
California Treasurer Phil Angelides called the recommendations to scale back the mortgage interest deduction and to kill the state and local tax deduction “a double-barreled blast aimed squarely at California and the middle class.” California, he said, has unusually high home values and state and local taxes.
“People making under $100,000 are going to be paying more,” Angelides said. People making more, he said, will generally pay less.