Bush continues call for simpler tax code

PARKERSBURG, W.Va. — President Bush continued his call Sunday for a simpler tax system and aides said he is considering a flat tax, which has the same income-tax rate for most taxpayers, as a major priority if he were to win a second term.

In arguing for a rewrite of tax laws, Bush said they are “a complicated mess” and “full of special-interest loopholes.”

“Americans spend about six billion hours of paperwork and headache every year on the tax code,” he said. “In a new term, I will lead a bipartisan effort to reform and simplify and make fair the federal tax code.”

A flat tax would have fewer — or no — deductions and credits. Administration officials, while saying no decision has been made, said the Treasury Department is studying such a system, and White House proponents assert it would encourage saving and investment.

Sen. John Kerry’s campaign contends that because many such proposals do not tax investment income like interest, capital gains and dividends, such a move would have the effect of shifting the tax burden from the wealthy to the working class. “This is the ultimate embodiment of what they’ve done the last four years,” said Jason Furman, Kerry’s economic-policy director.

An overhaul of the tax code was one of the major planks of the second-term agenda Bush announced in his acceptance speech Thursday at the Republican National Convention, and the idea is now a new applause line in his stump speech.

Bush took his road show to West Virginia for the second Sunday in a row and hit two swing states with one trip by appearing near the Ohio border. The result was news coverage in two battlegrounds and the ability to reward Ohio supporters with tickets to another presidential event.

Bush did not mention the weekend devastation by Hurricane Frances in Florida in his 32-minute remarks on the football field of Parkersburg High School, although administration officials said he is likely to visit Florida later this week.

In a new twist on Bush’s argument that Kerry is set on raising taxes, the president said the Democrat’s plan to eliminate the Bush tax cuts on those making more than $200,000 would stifle job creation by hurting small businesses, which create the majority of new jobs.

“I want for America’s workers to know that my opponent wants to tax your jobs,” Bush said. “His plan to raise taxes on those at the top end of the income tax scale will raise taxes for the 900,000 small businesses and entrepreneurs who pay at the individual rate and who are creating most of the new jobs in our changing economy.”

However, Internal Revenue Service data shows the majority of small businesses report much less than $200,000 in annual income.

A White House fact sheet released in conjunction with the convention speech said Bush will issue an executive order creating a bipartisan panel to advise the Treasury secretary “on options to fundamentally reform the tax code to make it simpler, fairer and pro-growth.” But Bush’s aides said they did not know when the panel would be appointed, who would be on it or when it would report, other than to say it would be some time in 2005, and the Treasury secretary would make recommendations to Bush soon thereafter.

A questioner asked about the possibility of a flat tax Saturday at an “Ask President Bush” campaign forum in Broadview Heights, Ohio. Bush was noncommittal, but did not shoot the idea down. “It’s certainly one option,” he said.

Asked to elaborate Sunday, a senior administration official said a flat tax and a national retail sales tax — which would replace the income tax with a tax on goods — “deserve consideration.”