Academic journal article Journal of Accountancy

Tax Reform Commission Hears Final Testimony

Academic journal article Journal of Accountancy

Tax Reform Commission Hears Final Testimony

Article excerpt

The National Commission on Economic Growth and Tax Reform, appointed by Senate majority leader Bob Dole and House speaker Newt Gingrich, held its final public hearing in Cleveland, Ohio, on September 27. A spokesperson for the 14-member committee charged with making recommendations for a tax code that is "flatter, fairer and simpler" said final recommendations would be issued late this month or in early January 1996. The commission, headed by former secretary of housing and urban development Jack Kemp, completed 12 public hearings over three months.

Witnesses at one hearing agreed that it was time to change the current tax system but urged policymakers to be cautious as they consider a switch to a flat or a consumption tax system. Congresswoman Linda Smith (R-Wash.) told the commission that the existing system was "destroying the entrepreneurial spirit." She said she supported the concept of taxing all income once, but that it would be very difficult to convince the average taxpayer of the benefits of a system in which dividends and interest income were taxed at the business level and not taxed to the individual, regardless of wealth. Smith also said that a flat tax would give new businesses a critical advantage over existing companies. "You have to make the transition in a way that doesn't wipe out existing businesses," she said.

Deborah Walker, chair of the American Institute of CPAs tax executive committee, told the commission that the AICPA had appointed a task force to study consumption and flat tax proposals and recommend policy positions, but it did not expect to conclude its work until the end of 1995. …

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