Virginia Lawmaker Asking for Complete Overhaul of U.S. Tax Code

Sep 9, 2016

One Virginia congressman is hoping to throw the entire U.S. tax code in the trash can and start over. 

Sunset the tax code? That’s the idea behind the Tax Code Termination Act, a bill introduced by Republican Congressman Bob Goodlatte of Roanoke. He says it’s time to spike the entire code and set a deadline for drafting a new one. 

“Our current tax code is a house of cards. And I don’t mean that from the television series I mean that from the traditional taking a stack of cards and trying very delicately trying to add one tier onto another."

Goodlatte says whatever Congress comes up with would be better than the current tax code.

“Notwithstanding all of the sectors of our economy that have their own little pet sections of the tax code that they want to protect or build on. Instead we should pull a card out of bottom of that house of cards and start over."

On the other side of the aisle Democrats view the bill as a cynical attempt to tap into anger at taxes and tax collectors and anybody associated with IRS. Congressman Gerry Connolly is a Democrat from Fairfax County. 

“This is just another cheap trick to fire up the base, who doesn’t like taxes and doesn’t like the IRS — who does? — and it’s kind of hard to go wrong, apparently, in the Republican base especially."

Connolly says it’s part of a pattern of behavior among the Republican leadership. 

“Let’s impeach the IRS commissioner, let’s not pay our taxes, let’s starve the IRS of resources and while we’re at it lets suspend the entire tax code."

Scrapping the tax code and starting over is not a new idea. House Republicans tried something similar back when Newt Gingrich was Speaker. And back in the 1980s Ronald Reagan led a knock down drag out fight culminating in Internal Revenue Code of 1986. That’s the one that Goodlatte wants to throw in the garbage can, which raises some important questions:

“What happens to your mortgage interest? Is it deductible or not? He doesn’t say. What happens to the income taxes you pay to the commonwealth of Virginia? He doesn’t say."

That’s Frank Shafroth, who says that experience thirty years ago shows the importance of laying out key details before taking drastic action. 

“So he’s silent on some very critical parts that were fundamental issues back in the heyday when President Reagan made his original proposal."

Credit Associated Press

Lobbyists on the bill include the U.S. Chamber of Commerce, Americans for Tax Reform and the National Taxpayers Union. Quentin Kidd at Christopher Newport University says these groups share an agenda.  

“You know they come from a  particular end in the ideological spectrum that want far less tax burden on businesses and corporations, far less regulatory on businesses and corporations."

Several of the lobbyists on the bill are from municipal power organizations — the Northern California Power Agency, Missouri River Energy Services, the Public Power Council and American Municipal Power Incorporated. 

“They’re taxed pretty heavily as far as they’re concerned, and they’re regulated extremely heavily. My suspicion is that a lot of the energy and power companies see the flat tax as a back door way to reduce regulatory oversight over their industry."

Under Goodlatte’s proposal, the tax code would expire at the end of 2019. That would set a hard and fast deadline for Congress, either pass a new tax code by July 2019 or face a financial crisis.