Panel Warns Against Poorly Designed Tax System Overhaul

NEW YORK -- Experts told a presidential commission in New Orleans that a poorly designed tax-system overhaul to make the current income tax more like a consumption tax would be "the worst of all worlds," Bloomberg News reported Thursday

Bob Greenstein, the founder and executive director of the Center on Budget and Policy Priorities, told the President's Advisory Panel on Federal Tax Reform not to add consumption-tax features, such as large tax-free savings accounts, to the income tax.

The panel, formed by the president to recommend ways to make taxes simpler and fairer, reports its findings this summer. It has been studying the possibility of adding a consumption tax, such as a national sales tax or a European-style value-added tax.

Federal Reserve Chairman Alan Greenspan has told the panel that some form of consumption tax could spur greater economic growth, but he cautioned that the government would face significant problems making the transition to such a system.

-- NYSSCPA.org News Staff

Posted on 3/24/05