3 A Fair and Balanced Tax System for the Twenty-first Century

President Bush has made clear that he intends to fulfill his campaign promise to “lead a bipartisan effort to reform and simplify the federal tax code, ” and he has appointed a panel cochaired by former senators John Breaux (D-La.) and Connie Mack (R-Fla.) to suggest options. But many in Washington are betting that major changes won’t happen, and tax lobbyists—including some with close connections to the administration and Republicans in Congress— are working to make sure that they don’t. Two decades ago, many similar forces were just as sure that Ronald Reagan’s tax reform plan had little chance. President Bush should take a page from Reagan’s playbook: He should invest as much of his own time, energy, and political capital in tax reform as he did in securing the tax cuts of his first term. And he must, as Reagan did, try to forge a bipartisan con-sensus. True bipartisan support is essential to obtain a genuine tax reform that has any hope of lasting. The smart money is against tax reform, as always. In 1986 the smar