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POLITICS: Bush expected to delay tax overhaul until 2006

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posted on Dec, 30 2004 @ 03:17 AM
President Bush’s plan to overhaul the tax code will have to wait for at least 2006. Key White House advisors have decided that reforming Social Security will pretty much keep them occupied for 2005. Experts feel that incremental changes are more likely rather than a dramatic shift.
WASHINGTON — Wholesale changes to the tax code that just weeks ago were identified as a Bush administration goal by the end of 2005 are being pushed back for at least another year.
White House economists, Republican tax aides in Congress and outside economic advisers say key White House officials have determined that they have their hands full with Bush's pledge to overhaul Social Security and a budget plan that will demand politically painful cuts to nondefense spending.

The president will soon name a panel to examine tax policy, but he will leave it to the Treasury Department to monitor the panel's work. It is widely expected that Treasury Secretary John Snow will ultimately recommend incremental changes to the tax code, not replacing it with a new system, such as a single flat income-tax rate or a national sales tax, according to these sources.

"The likelihood of a really dramatic change is fairly low," said Kevin Hassett, director of economic policy studies at the American Enterprise Institute.

"They're sort of punting," said one economic adviser outside the White House who maintains strong contacts with administration economists, noting that Bush is not likely to turn his attention to the tax issue until 2006, and will do so then only if the Social Security and budget issues have been resolved.

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I’m not surprised that this is the case. To take on the white elephant of Social Security will take a lot of effort. Most politicians are unwilling to entertain anything that may not get them elected the next go around. Special interests groups like AARP are already wading into the fray and the lobbying is going to work itself into a frenzied pitch.

[edit on 12/30/04 by FredT]


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