Changing the corporate tax rate along with rates on capital gains and dividends may be the place to start, Brill suggested.
But the 12-member bipartisan supercommittee must first succeed in its primary mission find deficit reduction over a 10-year window, the three panelists agreed.
“Ten weeks is a pretty tough timeline to produce comprehensive tax reform,” Brill said.
Brill said it’s one thing to determine how to change the tax code and another to actually put it into place.
“How you get from the code you have to the code you want is a difficult thing to do,” he said. “Those who worked on the 1986 tax act know it’s tough.”
Earlier in the day, Bill Hoagland, a former Republican staffer on the Senate Budget Committee, suggested that the committee get started with tax reform and then take those recommendations to start moving forward.
Alice Rivlin, senior fellow at Brookings and the former head of the White House’s budget office, agreed.
“Get done what you can get done between now and December, like close loopholes, raise revenues and set the stage for more comprehensive reform going forward,” said John Podesta, president of the liberal Center for American Progress and former chief of staff to President Bill Clinton.
Podesta said a major problem is that the tax code is three times longer than when he left the White House at the end of Clinton’s second term in 2001.
Under Clinton, tax revenues amounted to 20 percent of gross domestic product, while that percentage has dropped to 15 percent during the Obama administration, a decrease Podesta called “intolerable.”
“The president needs a balanced program to have revenues going forward,” Podesta said.
He said the committee will probably end up finding $1.2 trillion to $1.5 trillion in cuts and should end up with a 50-50 split on spending reductions and revenues, although he called it a “tall order in a GOP House” — though not impossible.
Raising taxes in the next two years is unlikely, but any change in tax policy should create conditions for demand among the middle class with a focus on short-term growth to get the economy growing again, Podesta said.
“I think we’ve proven that high-income tax breaks led to low growth, low job creation, low business investment,” he said.
Brill and Pamela Olson, a partner with Skadden, Arps, and a former assistant Treasury secretary for tax policy, said the congressional panel needs to look at other countries for tax code guidance.
“Our economy is far more global and business is more mobile than during the last major tax reform in 1986,” Brill said.
Olson suggested that reform might involve looking at a consumption tax, although the roundtable panelists agreed that that type of tax is very unpopular and politically unviable, for now.
“We need to look hard at what other countries are doing and recognize the fact that there’s global competition for jobs and capital,” Olson said.
“We must take a much harder look at the tax code if [we are going to] bring things to balance.”