Tax Analysts Tax Reform 20 Years Later

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PARTICIPANTS:

Introduction
LEONARD BURMAN

Panel I
CHRISTOPHER BERGIN
JOSEPH THORNDIKE
CHARLES MCLURE
CHRISTOPHER HOWARD

Panel II
ERIC TODER
JOSEPH MINARIK
WILLIAM GALE
LAWRENCE GIBBS

Panel III
PAMELA OLSON
EUGENE STEUERLE
DOUGLAS HOLTZ-EAKIN
RUDOLPH PENNER

PROCEEDINGS

(8:53 a.m.)

MR. BURMAN: Thank you all for coming to this conference, which I'm very much looking forward to. October 22nd, I think, 1986, Ronald Reagan signed the Tax Reform Act of 1986, I was actually at the event because I was the Treasury staff and they allowed us to stand way far back on the White House lawn.

And I remember when the president of the United States, who was probably the one person more responsible than anybody else for getting Tax Reform enacted, signed the legislation. He laughed nervously and said, "Oh, I signed my name backwards."

(Laughter)

MR. BURMAN: So I found that really disconcerting.

(Laughter)

MR. BURMAN: And there were, you know, in Congress that -- the two leaders of the tax reform effort were Dan Rostenkowski who ultimately went to jail for stealing postage stamps and Bob Packwood who left the Senate after it turned out he was a serial harasser. So in my view, the Tax Reform Act of 1986 was a huge miracle for many reasons. And one of the amazing things about the Tax Reform Act was that it closed a host of loopholes, and yet the law ultimately had overwhelming support in the Congress.

I think it's a real tribute to the fact that most voters don't know economics. They don't understand tax incidence; that the $100 billion in corporate tax increases were generally thought to be paid by corporations. And a lot of Blue Chip executives and corporate shareholders thought it was just a fine deal all around because they were going to get a big cut in their individual income tax rates.

Twenty years later I think it's clear that we need tax reform even more than ever, and its prospects seem even more remote than they did when Ronald Reagan floated the idea in 1984. Today's conference is not a nostalgia fest. We're going to talk first about what the 1986 Act meant, why tax reform is even more necessary now than it was in 1986, and what the next tax reform should be, and whether there is any way we could make it stick better than the last one.

I want to acknowledge the co-organizers of the conference here. The conference was organized by Tax Analysts, the American Tax Policy Institute, and the Tax Policy Center, which is a joint project of the Urban Institute and Brookings Institution. Larry Haas took care of all the logistics with help from Julianna Koch of the Tax Policy Center.

A number of people helped to organize the conference; Eric Toder and Gene Steuerle of the Urban Institute, Bill Gale of Brookings, Chris Bergin and Larry Haas of Tax Analysts, and Mike Murphy and Michael Schlear of the American Tax Policy Institute, and I think they did a great job.

Finally, I want to thank the exceptional panelists. Several of them changed their plans so that they could participate in this program, and I think we're really lucky to have all of them. Just one -- a few technical notes -- and one is if you have a cell phone, now will be a good time to either turn it off or turn it on to vibrate. That goes for BlackBerries, as well.

The conference is being recorded. There are handheld mics so before you speak you should identify -- get a microphone and identify yourself. We do want audience participation. The conference is designed to include lots of time for that. We have an exceptional audience here.

If I started introducing the luminaries in the crowd I'd go on for another 15 minutes. And we want you to participate. And finally, just to make clear, the conference is on the record. So keep that in mind. Enjoy and thanks very much to the great panelists.

Note: This report is available in its entirety in the Portable Document Format (PDF).

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