DOUG ROSS: We agree on need for tax reform, but not method

2012-04-25T00:00:00Z DOUG ROSS: We agree on need for tax reform, but not methodBy Doug Ross, (219) 548-4360 or (219) 933-3357

While we're on the subject of taxes -- and when do adults ever stop talking about taxes? -- let's examine what U.S. Sen. Dan Coats, R-Ind., added to the conversation a few days ago.

"There's a growing consensus that the tax code is way out of whack, too complex, not fair," Coats said Friday during a meeting with The Times Editorial Board.

But while there's a lot of support for reform, good luck trying to get everyone to agree with what form that reform should take.

Should the United States follow the Robin Hood theory of taxation -- steal from the rich to give to the poor -- or ease the burden on the wealthy, hoping they will create jobs with the money they're given?

There are arguments to be made for either side, and they've been made before. That's what created all those loopholes in the nation's tax laws.

Coats said he hates that the Obama administration has been picking winners and losers in doling out federal fund, but aren't tax loopholes doing the same thing? No matter how you look at credits and deductions, someone's going to win and someone's going to lose.

That makes calculating income taxes very difficult.

"We spend $6 billion a year filing our tax forms," Coats said. He has taken advanced courses in taxation, yet even he doesn't fill out the paperwork himself. Taxation is just too complicated for that.

But hiring experts to file tax returns can pay off. There's gold in them thar loopholes.

GE has famously drawn attention for paying little or no income taxes. Soon it will be another company's turn to earn that level of disrespect for taking advantage of every legal tax break it could.

Coats and Sen. Ron Wyden, D-Ore., are working to cut the corporate tax rate to 24 percent, or even less, and eliminate loopholes as part of their tax reform proposal.

"We're trying to build a bipartisan consensus to get this done," Coats said.

That means putting this highly controversial issue on President Barack Obama's plate when Obama is struggling to earn enough support to win re-election.

Obama has said he wants tax reform -- who doesn't? -- but needs to show actual support, not just rhetorical, Coats said.

As for himself, Coats didn't vote for the "Buffett rule" because, he said, "I'm for comprehensive tax reform."

The Buffett rule, inspired by billionaire investor Warren Buffett, would set a 30 percent minimum tax rate for the wealthy, closing many loopholes.

But Coats' zeal for comprehensive reform didn't stop him from co-sponsoring legislation to repeal the estate tax.

See how confusing and complex this process of gaining consensus on comprehensive tax reform is?

Editorial Page Editor Doug Ross can be reached at (219) 548-4360 or (219) 933-3357 or Follow him on Twitter @nwi_DougRoss. The opinion expressed in this column is the writer's and not necessarily that of The Times.

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