The Economic Recovery Advisory Board (ERAB) will be asked by President Obama to develop a task force to study ways of simplifying the tax system, reducing tax evasion and reducing "corporate welfare" incentives in the tax system. Additional goals include streamlining tax credits and reducing the "tax gap," while parameters include no new taxes prior to the 2010 elections and no tax increases on taxpayers with AGI below $250,000. The ERAB includes Chair Paul Volcker (former Fed chair), Martin Feinstein (economic advisor to President Reagan), Cal economics professor Laura Tyson, TIAA CEO Roger Ferguson and former SEC head William Donaldson.
Several things--we probably are due another round of tax code overhaul--after 20 to 25 years (since 1986), some dead weight probably needs to be cleansed; the ERAB has an impressive pedigree and there DEFINITELY is a need for practitioner input to assure that the final legislation does not produce the sorts of dislocation that occurred in the wake of the TRA of 1986. One must also remember that a theoretically excellent tax reform package (like that of David Bradford in 1985/86) is likely to be mangled by Congress and that simplification--short of drastic changes such as the "fair/flat" tax espoused by Mike Huckabee and others--is much easier in theory than in practice.