A sweeping overhaul of the tax code can boost economic growth and help solve the deficits.
Both Republicans and Democrats lauded the general idea known as "fundamental tax reform," which would simplify the tax code and broaden the base for tax revenues (by eliminating many credits and deductions). This would allow the government to collect more tax revenue without raising official tax rates on households and businesses.
Making the tax code more efficient would help to ensure that an effort to reduce federal deficits doesn't backfire by choking economic growth. Sen. Judd Gregg (R) of New Hampshire said the proposal "takes us out of this box" of debating unpopular tax-rate hikes as a deficit fix. The two sides still spar over details, with Republicans wary of using reforms to grab a lot of new revenue from taxpayers.
