That flies in the face of cozy, conventional talking points in Washington, where members of both parties publicly ache for a tax accord that “broadens the base and lowers the rates.”
But that Washington tax-reform shorthand – and the memory some lawmakers have of the 1986 tax reforms – ignores both a fundamental change in the state of the nation's finances and the growing income inequality, Schumer said.
When President Ronald Reagan and House Speaker "Tip" O’Neill (D) of Massachusetts achieved tax reform, which many in Washington have taken as a blueprint for current tax negotiations, the outcome was to cut top rates and shield the middle class but ignore the deficit, said Schumer, who not only voted for the measure but whipped his then-House colleagues to favor it as well.
Today, Schumer said, reforms can, at most, achieve two of the three stated goals, especially when taking into account which income groups actually benefit from preferences in the tax code.
With US debt more than doubled as a percentage of gross domestic product (GDP) compared with the mid-1980s, it is impossible to leave deficit reduction out of the picture, he said.
Likewise, he continued, statistics showing yawning growth in income inequality over the past several decades signal a need to protect middle-class Americans.
And that leaves reducing the highest tax rates out in the cold.
So how would Schumer obtain his starting point of $1.5 trillion in higher government revenues over the next decade?