For Tax Reform Lessons, Congress Needn’t Look Far
Steven M. Rosenthal, who served as staff director of the District of Columbia’s tax revision commission
and is a senior fellow at the Tax Policy Center, said the Trump administration and lawmakers should seek to “lower rates for competitiveness but tackle loopholes at the same time.”
“Lower rates mean fewer economic distortions — and the broader the base, the more we remove taxes as a driver of economic decisions,” he added.
The council chairman, Phil Mendelson, who led the effort, said the capital had to reform its tax code
and ease the burden on business and middle- and low-income taxpayers to stay competitive.
President Trump made his pitch for tax reform this week, but the odds are not favorable for legislation
that would reduce individual and corporate rates and promote economic growth without driving up the national deficit.
Yet in 2014 the council cut corporate and business taxes, reduced individual rates for everyone earning less than $1 million
and broadened the tax base by eliminating many loopholes.
“They almost succeeded in derailing it,” Mr. Henchman said.
There are no Republicans on the council, but as the Republicans have discovered, there can be sharp divisions within the same party.
“It was really just a loophole, but every loophole has a constituency, and they can be very vocal.”
What can lawmakers now trying to reform the federal tax code glean from the District of Columbia’s experience?
