Tax reform is one of those motherhood issues-everybody's for it. Election year 1972 generated many far-reaching tax reform proposals which, if enacted, would have a profound impact on virtually every segment of American society. Senator McGovern recommended taxing capital gains at the same rates as ordinary income, eliminating almost $7 billion granted to businesses by reducing the investment tax credit and depreciation allowances, and offering state and local governments a 50 percent interest subsidy to encourage them to issue taxable, rather than tax-exempt, bonds. In addition, he proposed eliminating the percentage depletion allowance and the deduction for intangible drilling expenses – two provisions which currently diminish the taxes on income from the production of oil, gas, and other natural resources. And, even though President Nixon did not detail any tax reform proposals during the campaign, he did pledge to attempt to reduce state and local property taxes. Thus, tax reform, a much discussed topic in the past months, seems certain to become a subject of concern for the 1973 Congress.
In spite of the myriad nature of the proposals, a consensus on goals of tax reform is fairly easily obtained. President Nixon, Senator McGovern, and Congressman Wilbur Mills all agree that reform should simplify the tax laws, produce greater equity in taxation, and promote economic growth. Concurrence on means, however, is a different matter; those three are far less likely to agree on specific tax reform measures. Political and philosophical biases only partly explain disagreements over the merits of particular proposals. Perhaps more important is the complexity of the task. Economic debate of alternative tax measures inevitably brings to mind Paul Douglas' remark that one could lay all the economists end to end around the world and they would never reach a conclusion. Moreover, attempts to improve the equity of the federal tax system often directly collide with efforts to simplify it. Within Congress, decision-makers tire of responses of "on the one hand ... but on the other hand" and search constantly for a one-handed lawyer.
Michael J. Graetz,
Reflections on the Tax Legislative Process: Prelude to Reform,
Va. L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/397