“In a new term, I will lead a bipartisan effort to reform and simplify the federal tax code.”

-- George W. Bush, nomination acceptance speech, Sept. 2, 2004.

George W. Bush has been talking generally about the cumbersome U.S. tax system, and his desire to reform or simplify it, since the 2000 campaign. During his administration, Treasury Secretary Paul O’Neill, Council of Economic Advisers Chairman Glenn Hubbard and others tried to put meat on bone of this campaign slogan. O’Neill, for one, called in leading tax experts from around the country to analyze the issue. In 2002, efforts coordinated by Assistant Treasury Secretary Pam Olson –- one of the country’s leading tax experts –- produced several reports assessing a variety of reform options for presentation to the President.

But Deputy Chief of Staff Josh Bolton, O’Neill now recalls, said those reports “shouldn’t see the light of day” – that fundamental tax reform, Bolton said, was far down the list of priorities. O’Neill talked about fundamental tax reform several times with Bush, starting in the early days of the administration, but, he says now, “I don’t remember him ever showing any enthusiasm about the idea for fundamental tax reform, either simplification or clarification . . . I don’t think he really understands what fundamental tax reform is about – to him, it’s just a line from a speech.”

In September of 2002, O’Neill emphatically told Bush that he shouldn’t attempt a second large proposed tax cut – this time ending the double taxation of dividends – because it would deepen deficits and mean “you won’t have any money to do anything you want to do, such as changing social security or fundamental tax reform, for the rest of your term. Now’s the time to keep your powder dry. Any other path is not responsible.”

Now, with annual deficits at nearly $500 billion, one question is how the administration plans to pay for a variety of domestic proposals, including tax reform, which the President mentioned in his acceptance speech at Madison Square Garden.

In any event, the administration’s actual assessment of the pros and cons of various proposals – like a flat tax on consumption, another one on income, and various value added taxes, including one called IVAT ("income value added tax with Social Security integration," in which Social Security and income taxes would be abolished in favor of a single tax on compensation paid by businesses) –- are found in the posted document. This cogent document, with a cover note from Pam Olson to O’Neill, is the blueprint, constructed to guide discussions by economic policy principals and the President about how to fundamentally change the U.S. tax system.