What is fundamental tax reform? It certainly is not merely tinkering with the rates and pruning the dead wood from old deductions. That exercise can more accurately be likened to rearranging the deck chairs on the Titanic.
Rather, fundamental tax reform is about changing the structure of the tax system so that the following adverse economic trends are addressed:
1. the crisis in SS & Medicare,
2. the trade deficit and the ongoing erosion of our manufacturing base,
3. the federal budget deficit, to the extent that slower economic growth is a major contributing factor,
4. our low personal savings rate, a source of concern for almost all serious economists,
5. the AMT
6. the ongoing spiral of increased complexity and higher and higher compliance costs
In addition to being exacerbated by the current tax system, all of these have one other thing in common – they are all unsustainable.