On January 7, 2005, President Bush established the President’s Advisory Panel on Federal Tax Reform. The Panel is charged with developing a policy report by July 31, 2005, that sets forth options for reforming the tax code to make it simpler, fairer, and more pro-growth. Furthermore, the Executive Order requires that at least one option submitted should use the Federal income tax as the base for its recommended reforms.

In response to a request for comments from the Panel, the Tax Division submitted preliminary materials on guiding principles that should be considered in evaluating and recommending tax reform options. The submission also included simplification recommendations and copies of the 1995 AICPA Report, Flat Taxes and Consumption Taxes: A Guide to the Debate.

While the debate may be different in 2005, the issues have not changed. Accordingly, the Tax Division will issue a new tax reform report this summer. It will draw upon the basic analysis developed in 1995, provide coverage of developments during the past decade, and add expanded discussion of hybrid approaches that might be considered in the current reform environment.

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