President's Advisory Panel releases report on how to simplify the tax code

Author: Anchor Scott Jagow, Reporter Janet Babin

Published: November 1, 2005

SCOTT JAGOW, anchor: Diagnosing the symptoms.

Announcer: The MARKETPLACE MORNING REPORT is produced in association with the University of Southern California.

JAGOW: From American Public Media in Los Angeles, I'm Scott Jagow. Headaches, maybe some nausea, fatigue--no, I don't mean the flu. I'm talking about taxes, filling out those complicated mind-bending forms. Today Mr. Bush gets a big old report dropped on his desk from the President's Advisory Panel on Tax Reform. Here's MARKETPLACE's Janet Babin.

JANET BABIN reporting: The panel's marching orders were to simplify the tax code, and while the end result may be revenue neutral, to some, the suggestions will seem like a tax increase. Brookings Institution senior fellow Bill Gale says the panel's message is one many Americans don't want to hear: no more pet deductions.

Mr. BILL GALE (Brookings Institution): We're going to start over with a clean base. We're going to put in a few key deductions, exemptions, etc., but other than that, you know, `tell it to the judge' is sort of their approach.

BABIN: The suggested changes include a cap on home mortgage interest deductions, a limit on exemptions for employer provided health insurance and an end to reductions for state and local taxes. Also nixed: the alternative minimum tax, meant to eliminate loopholes. I'm Janet Babin for MARKETPLACE.