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Chairman Robert Packwood (R., Oregon) and the Senate Finance Committee deserve credit for saving tax reform from a near certain death. The committee proposal achieves several desirable goals.
The plan would increase the personal exemption from $1,080 to $2,000; 6 million of the working poor would be dropped from the tax rolls altogether. The present 14 tax brackets would be reduced to only 2–15 and 27 percent. Lowering the marginal rates would encourage savings, investment and production.
Despite some deficiencies, the proposal would make significant improvements and lead to a new surge of economic vitality that would benefit everyone–rich and poor alike. It is a major step in the right direction.
