Tax reform faces new challenges: rate reductions alone may not suffice.
The President's Advisory Panel on Federal Tax Reform recommended two tax reform plans in 2005 to make the income tax system simpler, fairer, and more growth-oriented. The plans were criticized for not reducing rates as much as in the past. The Panel faced economic and political constraints that made reducing tax rates difficult. The current tax system's complexity and expiring provisions made popular support for rate reductions challenging. Compared to the 1980s, tax reform today is more politically difficult, making it harder to lower tax rates and gain public support for reform.
