U.S. Rep. Bob Goodlatte (R-Va.) is pushing legislation that would sunset most of the federal tax code in order to "spur the process" of tax reform.
The "Tax Code Termination Act" would scrap the Internal Revenue code of 1986 - the last time major tax reform was enacted - on Dec. 31, 2019. Only the self-employment tax, Social Security and Medicare taxes, and railroad retirement taxes would survive.
The bill does not favor a specific tax reform model, but suggests a new code provide tax relief, and lower tax rates, while eliminating "bias" against savings and investment.
The measure currently has 131 co-sponsors; all but one of whom are Republicans.
In testimony before the House Ways and Means Committee, Goodlatte said the current tax code is "unacceptable," and, "far too complex" and that tax compliance places too great a drag on the economy.
"Citizens across the country will have spent weeks, and sometimes months, completing their tax returns by next Monday," he said. "They will devote billions of hours complying with the tax code, and will spend billions of hard earned dollars on tax software, tax preparers, and other expenses related to collecting and filing their federal income taxes."
Goodlatte said his bill would create a "foundation to ensure" Congress creates a newer, more fair, tax code. He introduced similar legislation in 2007, but that bill died in the Democrat-controlled House Ways and Means Committee.
Beth Breeding, Rep. Goodlatte's communications director, told AMI Newswire that the congressman "has spoken with both the Ways and Means Committee as well as House Leadership regarding the Tax Code Termination Act," and his hope is "it will be brought before the full House this year."
Breeding said there is currently no companion legislation in the Senate, but "many Senators have expressed the need for tax reform."
Goodlatte's bill has generated outside support from conservative groups, such as Americans for Tax Reform, and Let Freedom Ring.
In a Washington Times op-ed last July endorsing the sunset idea, Let Freedom Ring president Colin Hanna wrote that sunsetting the federal tax code would "create real urgency" in Congress to get something done, but with a sunset deadline "far enough into the future" to avoid "spooking the capital markets."
Asked whether the business community has expressed reservations about a tax code sunset, Breeding said that "the business community has also been outspoken about the need for comprehensive tax reform."
The National Association of Manufacturers, which has opposed past efforts to sunset the federal tax code, says on its website that while it supports "comprehensive tax reform," the group also insists that "our current system must remain in place until policymakers can agree on a viable reform plan."
The popular appeal of ending the current tax code is reflected in polling Let Freedom Ring commissioned on the issue from McLaughlin and Associates.
According to that poll, 69 percent of respondents agreed when asked “Would you support or oppose terminating the current tax code at the end of 2019 as a way of forcing the Congress to enact tax reform before then?"
But when the House has voted on sunset legislation in the past, few Democrats, and even some Republicans, have derided the idea as too risky.
In a 1998 debate over a tax code sunset that eventually won House approval 219 to 209, former Democratic Rep. Pete Stark of California said a sunset would lead to financial "anarchy."
In that same debate, Republican Rep. Amo Houghton of New York called the sunset idea "highly irresponsible," and said it would lead to great uncertainty in financial markets.
Goodlatte's office is undeterred by past concerns. Breeding said the "Tax Code Termination Act provides the starting point needed to enact the kind of tax system the American people deserve."