Obama should appoint a panel to work on reforming tax code

President Barack Obama, in his first State of the Union address to a Republican-controlled Congress, was far from conciliatory when he challenged lawmakers to raise taxes on the wealthiest Americans and use the revenue to give tax cuts to the middle class and to finance a slew of programs, including tuition-free community college and infrastructure improvements.

The tax proposal was initially unveiled by the president in recent weeks as he traveled the country, and it was clear from the outset that Republicans in the House and Senate, emboldened by their party’s stunning victory in the 2014 election, will not buy what Obama is selling.

Thus, when the president stood Tuesday night before the joint session of Congress and discussed his tax initiative, Republicans in the chamber, led by House Speaker John Boehner, R-Ohio, made no effort to hide their disdain.

Therein lies the problem. Despite the president saying that such reform should be a nonpartisan issue, the undercurrent of partisanship cannot be ignored by the White House.

This political divide is unfortunate because there is — and has been for a long time — an urgent need to reform the U.S. tax code.

Every year around this time, as Americans prepare their tax returns or hire accountants to help them navigate through the thicket of regulations, the demand for simpler and more fair tax laws gets louder.

In a direct assault on Republican ideologues, Obama is calling for increasing the capital-gains rate on couples making more than $500,000 annually, to 28 percent.

The president’s tax plan would also require estates to pay capital gains taxes on securities at the time they’re inherited and slap a fee on the roughly 100 U.S. financial firms with assets of more than $50 billion.

Much of the $320 billion in new taxes and fees would be used for measures aimed at helping the middle class, including a $500 tax credit for some families with two spouses working, expansion of the child-care tax credit and a $60 billion program to make community college free.

“Will we accept an economy where only a few of us do spectacularly well?” Obama asked Tuesday night. “Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”

The president is right in wanting to address the unequal application of tax laws, but he has taken the wrong approach.

Presidential commission

Rather than expecting the Republicans to march in lock-step with him, Obama would do well to appoint a bipartisan presidential commission to review the voluminous federal tax code and make recommendations to address the shortcomings and meet the demands of the American people.

Political pundits are suggesting that Obama knew his tax plan would be dead-on-arrival when he sent it to Congress, but is pushing it to highlight the ideological differences between Democrats and Republicans.

The president’s goal, they say, is to lay the groundwork for the 2016 election — even though he will be leaving office.

While class warfare is now as much a part of presidential politics as money (a lot of it), such battles have no place in the formulation of public policy.

The tax code must be revised, but in a non-partisan fashion, which is why we believe Obama should invite Democrats and Republicans, business and labor leaders and representatives of community-based organizations to take on this important task.