The budget debate in Washington goes on, highly partisan and seemingly with little prospect for compromise, much less progress. Even after the November elections, it’s likely neither party will gain enough power to move fiscal matters in a concerted direction. Still, for all the prospect of an impasse, tax reform remains possible. It would be an overstatement to say that substantive reform is probable, but the prospect is much greater than most investors and business people seem to believe.
For all Washington’s intense partisanship these days, similar tax reform proposals have surfaced with remarkable frequency on both sides of the aisle. All, in one way or another, would reduce statutory tax rates and broaden the base by eliminating tax write-offs and other breaks. Though prospects for such reforms seem far-fetched, their reoccurrence speaks to a broad underlying appeal.