STEVE INSKEEP, host:
Congress is considering whether to extend tax cuts enacted under President Bush. But that is not the end of the debate over taxes. Regardless of what the rates are, two senators say the tax code is far too complicated. Since the last big overhaul of tax regulations in the 1980s, thousands of new provisions have been added.
As part of this week's series on taxes, NPR's David Welna reports on the effort to simplify the code.
DAVID WELNA: Earlier this year, Democratic Senator Ron Wyden of Oregon joined New Hampshire Republican Judd Gregg at a news conference here at the Capitol. Wyden said they'd worked together for two years on a revamping of the bloated 1986 tax code.
Senator RON WYDEN (Democrat, Oregon): We want to show, with a code with 10,000 sections, 3.7 million (unintelligible) words, that this system is broken. It is a broken tax code.
WELNA: Wyden said Americans now spend billions of hours each year on their taxes and nearly $200 billion making sure they comply with tax laws.
Sen. WYDEN: So what we're trying to do is draw a line in the sand and say that we want to make filling out your taxes something that a human being can actually do.
WELNA: To do that, Wyden and Gregg shrank the number of lines on the 1040 tax return form from 76 to 30. They got rid of scores of loopholes, including one that allows people to deduct punitive damages paid in a lawsuit, and instead of the current 35 percent corporate tax rate, they called for a flat 24 percent rate to encourage firms to stay in the U.S. and hire more Americans.
Republican Senator Gregg said what's most important about the measure is that it's bipartisan.
Senator JUDD GREGG (Republican, New Hampshire): I mean, it's sort of unique around here to have senators from both sides of the aisle stepping forward with a major proposal, which is extraordinarily expansive on one of the core issues of policy, which is tax policy. And we see that in and of itself as being a positive step. But more importantly, if people look at the actual proposal, they're going to say, wow, my goodness, this is an idea that makes sense.
WELNA: And leading lawmakers do agree the current tax code is unfair and obsolete.
Senator KENT CONRAD (Democrat, North Dakota): It's increasingly clear to me that we need fundamental tax reform.
Senator MAX BAUCUS (Democrat, Montana): Clearly, we need reform. There's no doubt about that.
WELNA: Those were two powerful Senate Democrats, Kent Conrad, chairman of the budget committee, and Max Baucus, who heads the tax law writing finance committee.
Baucus has not yet held a hearing on the Gregg-Wyden proposal. That did not keep Wyden from talking it up at a recent Finance Committee hearing on the Bush-era tax cuts that expire this year.
Sen. WYDEN: Democrats and Republicans can come together and take a machete to the preferences, this blizzard of deductions and exemptions and credits.
WELNA: That was met by a bit of skepticism from one of the hearing's witnesses, tax expert Leonard Burman of Syracuse University.
Mr. LEONARD BURMAN (Syracuse University): Taking a machete at preferences I think is a great idea, but you know better than I do how hard that is, because there's such a strong constituency for every one of those.
WELNA: There was also this advice on how to proceed from Douglas Holtz-Eakin, the head of the Congressional Budget Office under President Bush.
Mr. DOUGLAS HOLTZ-EAKIN (Former Director, Congressional Budget Office): The best way to get to something like Wyden-Gregg or a tax reform that a tax economist would be proud of would be to lock the business community out of the room.
WELNA: But that won't happen, according to Vermont independent Senator Bernie Sanders.
Senator BERNIE SANDERS (Independent, Vermont): Does anybody in their right mind think that you're going to have equitable tax reform here in Washington where we're going to be descended by all kinds of lobbyists representing the wealthiest people and loopholes they're going to put in? It ain't going to happen.
WELNA: George Washington University congressional expert Sarah Binder says several things have stood in the way of overhauling the tax code. One is a shortage of moderates on Capitol Hill for a bipartisan coalition. Another is that Congress has been tied up with too many other issues.
Ms. SARAH BINDER (George Washington University): Just wasn't(ph) time to grab to get attention on the House or Senate floor, and I think the longer proposals sort of linger out there, sort of risk losing the enthusiasm for them, or certainly risk losing Gregg as a driver.
WELNA: That's because Senator Gregg is retiring at the end of the year. Still, he hasn't given up hope on his proposed overhaul.
Sen. GREGG: I do believe that the opportunity is sitting there if the Congress wants to - has the courage to step up and address it. Now, can it be done in the context of an election and then a lame duck? Unlikely.
WELNA: And not likely by next April 15th either.
David Welna, NPR News, the Capitol.
INSKEEP: And you can explore the rest of our series about taxes at npr.org.
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