Sen. Charles Schumer, D-N.Y., outlined Tuesday his own “way forward” to avoid the looming fiscal cliff and “break the deadlock” among lawmakers as they come to a “grand bargain” in the upcoming lame-duck session and move forward with reforming the tax code next year.
In a speech before a packed room at the National Press Club in Washington, Schumer, the Senate’s third-ranking Democrat, told reporters that if you “ask policymakers–Democrats, Republicans and independents alike–what the broad outline of tax reform might look like, you get a startlingly consistent answer: dramatically lower the rates and broaden the tax base by getting rid of loopholes in the tax code.”
However, this approach–which was invented by President Ronald Reagan and Congress in 1986, and recently endorsed by the Simpson-Bowles plan as well as the “Gang of Six,” a bipartisan group of senators–should be “scrapped” in the upcoming talks on the fiscal cliff, Schumer said.
(The New York Times reported that Republicans, embodied by a spokesman for House Speaker John Boehner of Ohio, decried Schumer’s speech.)
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Schumer said “old style” tax reform is now obsolete because there are two new conditions that exist today that didn’t exist when the Tax Reform Act of 1986 was passed: “a much larger, more dangerous deficit, and a dramatic increase in income inequality.”
Schumer laid out his own three-pronged approach to tax reform, noting that “any path forward on tax reform that promises to cut rates will end up either failing to reduce the deficit or failing to protect the middle class from a net tax increase.”