Treasury Secretary Paul O'Neill is overseeing a team of over 100 tax policy experts at the Treasury Department who are putting together a package of tax reform options to present to the White House right after the first of the year. Designed to simplify the Internal Revenue Code, possible options include replacing the corporate income tax with a value-added tax, offering businesses a one-time investment credit, reforming the individual and corporate Alternative Minimum Tax, streamlining definitions such as the current five different definitions of "child" that appear in the Code, simplifying regulations on savings bond sales, and much more.
"The way I look at this, we essentially
have a tax system that's held together by
chewing gum and chicken wire."
Mr. O'Neill, long a proponent of tax reform, said, "There's a whole lot of people who don't like this abomination of a tax code, and I'm one of them. It's 9,500 pages of absolute gibberish."
Assistant Treasury Secretary for Tax Policy, Pamela F. Olson agrees. "The way I look at this, we essentially have a tax system that's held together by chewing gum and chicken wire," she said.
The tax reform package will include proposals for immediate changes that can simplify the tax code as well as suggestions for long-term changes. Mr. O'Neill has been gathering support for tax change from audiences around the country. "I'm getting plenty of reinforcement," he said.
The complexion of the House and Senate may change after the upcoming elections, and these new proposals won't be disclosed until next year. It will be up to the new Congress to determine how much tax change will be effected in the foreseeable future.