Recent Quotes By and About
on Fundamental Tax Reform
Quotes from Ernie Christian in the article by Jim McTague
Last, Sensible Taxes" in the October 24th edition
-- "'It is a remarkably good plan; the president ought
to seize it,' says Ernest Christian, a tax lawyer who long
has argued that the existing code dampens growth and competitiveness."
-- "Christian says that the plan is especially attractive
for companies because it eliminates the complex corporate
income tax, along with its onerous double-taxation of dividends,
and replaces it with a lower-rate system that is simpler to
-- "Christian suggests that [Secretary] Snow take the
reforms for individual taxpayers in Plan A and combine them
[cashflow] tax approach for corporations in
Plan B to produce a hybrid that would reduce the rates and
spur savings, corporate investments and exports."
the full article (PDF)
Quotes from Ernie Christian in the article by Brian Mitchell
"Tax Panel Backs Moderate Tax Reform, Revenue Neutral
And A Bit Less Complex" in the October 19th edition
of Investor's Business Daily.
- "Ernest Christian, former assistant treasury secretary
for tax policy and founder of the Center for Strategic Tax
Reform, was upbeat."
- "It's definitely the thinking man's approach to tax
reform," Christian said. "They have covered all
the bases and kept the focus largely on economic growth, which
is what tax reform is all about."
the full article (PDF)
Quotes from Ernie Christian in the article
by William Tucker that appeared in The
American Enterprise magazine July/August 2005 edition.
- "By putting a bull's eye on income, our current tax
system encourages people to consume instead of invest. 'Savings
are taxed twice -- once as earnings, and once when they earn
interest in a savings account,' says Ernest Christian, executive
director of the Center for Strategic Tax Reform. 'Corporate
profits are likewise taxed twice, once as business income,
once as personal income of shareholders. Capital gains are
generally taxed at 15 percent. At the same time, interest
payments on debt are a deductible expense.'"
- "The result of our tax incentives, Christian notes,
is to discourage savings and encourage debt. 'There's a shift
away from riskier investments and toward more conservative
corporate borrowing,' he says. 'This works against innovative
companies and makes it harder to improve productivity.'"
- "On the other hand, many conservatives see a danger
in the Earned Income Tax Credit, which has created a whole
class of low-income voters who actually take refunds out of
the system. 'It's very dangerous to exempt large numbers of
people from income taxes,' says Christian, of the Center for
Strategic Tax Reform. 'You create a whole segment of the population
that can vote to raise taxes without feeling any pain.'"
- "An alternate to complete overhaul of our tax system
may be incremental reform
All these incremental improvements
would add up. 'Every tax reformer's inclination is to propose
something dramatic that captures the public's attention,'
says Ernest Christian. 'But real tax reform is not about dramatic
proposals, it's about dramatic accomplishments.'"
the full article (PDF)
"The Wiggle Room"
"The problem with the sales-tax idea, according
to tax lawyer, Ernest Christian, is that too many people find
parts of it to be unpalatable . . . .
Christian claims the existing tax system can be fixed so
that it promotes growth and reward savings by making just
five changes - the so-called Five Easy Pieces.
Bush and the last Congress implemented the first piece when
they reduced tax rates. What are the remaining four pieces?
First, Congress must restore the provision that allows businesses
to write off equipment in the first year rather than over
a longer period, making equipment purchases more attractive
and stimulating the economy. It expired Jan. 1.
Second, Congress must stop taxing exports, Christian says.
The Europeans don't tax theirs; as a result, U.S. exporters
suffer a government-imposed disadvantage.
Third, Congress must figure out a way to reduce taxes on
corporations' overseas income and still comply with World
Trading Organization trading rules, a tricky but not impossible
task, Christian says.
Finally, Congress must eliminate taxes on savings. President
Bush's first-term proposal for tax-free lifetime savings accounts
would satisfy this end, the lawyer asserts."
-- "The Wiggle Room" by Jim McTague, Barron's,
"'Simpler, Fairer' Corporate Taxes"
"According to a now-famous plan that tax lobbyist Ernie
Christian laid out years ago, advocates of fundamental change
in the tax code can achieve many of their goals through the
"five easy pieces" of tax reform, retaining the
current income-based system while cutting rates and increasing
deductions. Bush tinkered with three of the five pieces in
his first term: He lowered individual income tax rates, temporarily
sped up depreciation of business investments, and cut dividend
taxes. Bush already has a detailed proposal for the fourth
piece - exempting much of savings from income taxation. By
adding in the fifth piece - a way of cutting taxes for exporters
that builds on a current year's foreign-sales corporation
tax law - and extending the tinkering with the others, Bush
could claim to have achieved significant tax reform."
-- "'Simpler, Fairer' Corporate Taxes" by John
Maggs, National Journal, 1/8/05
"Tax Overhaul Faces Good Odds, But Details,
Timing Aren't Near"
"People need to get over these brand-name
ideas and just deal with generic concepts of tax reform, which
isn't all that complicated. It does not involve all these
horrible things like doing away with itemized deductions and
charitable contributions and home-mortgage interest. Those
things do not serve any simplification purpose."
-- Ernest S. Christian as quoted in "Tax Overhaul
Faces Good Odds, But Details, Timing Aren't Near" by
Brian Mitchell, Investor's Business Daily, 1/3/05
". . . But there is almost certainly more to it than
that. Experts on both the right and the left say Bush appears
to be following a version of a strategy known as Five Easy
Pieces. The approach was first laid out in a 2001 essay by
tax expert Ernest Christian of Washington, D.C., and economist
Gary Robbins of Fiscal Associates, Arlington, Va. Christian
was a tax specialist in the Ford administration and gave advice
to Ronald Reagan. Robbins was a career tax specialist at Treasury
when Reagan was in office.
Rather than engage in a protracted and doomed effort to overhaul
the entire tax system, Bush instead is gradually removing
what conservative economists have identified as five major
impediments to economic performance. The Five Easy Pieces
plan calls for:
Bush has yet to propose this, but probably would in a second
term. Each of these five items has its own merits and a powerful
constituency, according to Christian and Robbins. Therefore,
Congress is more easily motivated to make these changes than
it is to overhaul the entire system . . . ."
- Lowering marginal rates to increase after-tax income and
encourage work. Bush already has done it, though the cuts
are set to expire in 2011. Bush is pushing to make those
and other cuts permanent.
- Ending "double taxation" of corporate earnings.
Bush has partially achieved this with cuts in dividend and
- Speeding up write-offs on business equipment, ultimately
letting firms deduct 100% of the cost in Year One. Bush
has made headway, but a 50% depreciation bonus for some
equipment expires this year. Some in Congress are pushing
for an extension.
- Removing taxes on most personal savings. Bush has proposed
it, but Congress has yet to approve.
- Excluding export and other foreign-trade income from corporate
". . . .Christian predicts a two-term Bush also would move
to significantly cut taxes on exports and foreign-source income
-- the last of the Five Easy Pieces. Christian is forming a
coalition of exporters to push the case for tax breaks on trade.
'We tax our exports to the rest of the world, but the rest of
the world doesn't tax its exports to us,' he says. This puts
the U.S. at a trade disadvantage of between $120 billion and
$150 billion a year, he figures. 'It isn't the marketplace alone
that is causing the transfer of U.S. jobs abroad,' he argues.
'A very heavy government thumb on the scale is working against
us. . . .'"
". . . But Christian says that adding just half a percentage
point of GDP growth over the years would eliminate the projected
budget deficit in about 10 years. He says that an additional
three-quarters of a percentage point of growth over the same
period would result in a surplus . . ."
-- "Another Whack," Barron's by Jim McTague,
"Sorting Through a Shift Toward a Consumption Tax"
" . . . 'George W. Bush is the first president to actively
understand and embrace the fundamental core principles of
tax reform,' says Ernest Christian, a founder of the Center
for Strategic Tax Reform in Washington . . . . "
"Mr. Christian would like 100 percent depreciation in
the first year. He also wants to excuse from taxation export
and other foreign-trade income of US multinationals, as many
other nations do. . . . "
"Sorting Through a Shift Toward a Consumption Tax,"
Christian Science Monitor by David Francis, 6/30/03
"Anti-Tax Crusaders Work for Big Shift"
". . . Last year, Ernest S. Christian, a Treasury official
in the Reagan administration and founder of the Committee
for Strategic Tax Reform, devised a plan for stealth tax reform
in 'five easy pieces.'"
"Placed against the tax cuts of the past three years,
Christian's agenda is beginning to look like a road map: lower
marginal income tax rates, including capital gains tax rates;
eliminate taxes on dividends; accelerate the speed with which
businesses can write investment expenses off their tax bills;
expand the Roth Individual Retirement Account to all personal
saving; and exclude export and other foreign trade income
of American companies from taxation."
"The first piece, lower rates, has now been accomplished
in dramatic fashion. The top income tax rate of 39.6 percent
in 2001 has now fallen to 35 percent, while the tax rate on
most capital gains has fallen from 20 to 15 percent. The second
piece took a substantial leap toward completion when taxes
on corporate dividends were cut last month from a top rate
of 38.6 percent to 15 percent for most dividends, and 5 percent
for others. A year ago, the concept of the "double taxation
of corporate earnings," as opponents refer to dividend
taxation, did not exist in the political lexicon. Now it is
front and center."
"As for the third piece, tax cuts in 2002 and 2003 drove
up depreciation rates to the point where companies can now
write off at least half the cost of their investments in the
"And with his 2003 budget, Bush appeared to have followed
Christian's fourth recommendation precisely by proposing "lifetimes
savings accounts" that would allow everyone, regardless
of age or income, to shield $7,500 a year from investment
taxation. The accounts would be accessible at any time for
any reason. A family of five could put away $37,500 annually,
a figure that very few Americans could even contemplate saving."
"'If you beat your breast, jump up and down, and come
in with some revolutionary idea to change the tax code overnight,
you're just going to scare the devil out of everyone; we don't
do revolutionary things,' Christian said recently. 'Now, the
last stage, three years or so from now, is that we say we've
done the substance [of tax reform] already, but the code is
still complicated. Let's really simplify it a lot and finish
"Anti-Tax Crusaders Work for Big Shift," Washington
Post by Jonathan Weisman, 6/14/03
"Tax Cut Embodies Political Agenda"
". . . The changes also achieve another long-cherished
goal of conservative reformers by lowering marginal rates
to encourage work and risk-taking.
"In effect, Mr. Bush's tax strategy follows what veteran
Washington tax lawyer Ernest Christian has labeled the "Five
Easy Pieces" approach - breaking tax reform down into
its components parts and pushing them separately. That has
proved to be a successful tactic in recent years, particularly
for issues like repeal of the estate tax. . . ."
"Tax Cut Embodies Political Agenda," Wall
Street Journal by John McKinnon, 5/27/03
". . . Norquist and many of his allies among the tax
reformers have recently become Christians, but not in the
spiritual sense. They've singed on to an approach to reform
championed by Ernest Christian, a business lobbyist and former
Treasury tax official who has been one of the most tireless
advocates over the years for fundamental reform. In 1999,
after the failure of another stab at sweeping reform, Christian
said he decided that the 'political system is just not prepared
to swallow something this big.' Instead, he spent time identifying
the most important steps toward fundamental reform that could
be enacted one at a time and then imposed without much adjustment
to the existing system of income taxes and deductions."
"He came up with five changes, and called them 'the Five
Easy Pieces of tax reform.' The five are:
1) lowering marginal tax rates;
2) eliminating the double taxation of corporate earnings;
3) speeding up depreciation so that all capital investment
is immediately tax-free;
4) expanding the Roth IRA to cover all personal savings; and
5) ending taxes on exports and on income that corporations
Christian says that these changes would almost entirely accomplish
the goal of making savings and investment tax-free and flattening
tax rates so that people aren't discouraged from additional
earnings by having to pay tax at a higher rate than on the
first dollar earned that year . . . ."
"Slow Burn," National Journal by John
"Inching Toward Tax Reform"
". . . None of these tax proposals would be dramatic
on its own. They will probably be proposed under the rubric
of tax cuts geared toward giving the economy a lift. But cutting
taxes isn't the Administration's only goal. Taken together,
the proposals also add up to a broad if 'stealthy' reform
package aimed at easing the current revenue code's bias toward
taxing savings and investment rather than consumption. 'You'll
never be able to do Big Bang tax reform,' says Ernest S. Christian,
a corporate lobbyist and veteran of Washington's tax wars.
'But you can do it in five easy pieces . . . .'"
"Inching Toward Tax Reform," Business Week
by Howard Gleckman, 12/16/02
"Tax Reform in Five Easy Pieces"
". . . Ernest S. Christian and Gary Robbins, two former
Treasury Department officials, offer a very attractive alternative,
which they call the "five-easy-pieces" approach
to tax reform. None of the components is strange or exotic,
and the president doesn't need to pore through a catalog of
past recommendations; he already endorsed the five easy pieces
right after the Waco economic summit last summer.
Messrs. Christian and Robbins suggest a method of maintaining
the American tradition of taxing income while lowering the
exorbitantly high marginal tax rates that discourage work,
penalize personal saving and depress business capital investment,
which substantially depress productivity and wage gains.
Their approach also would eliminate the perverse aspects of
the current tax code that greatly disadvantage American manufacturers
and exporters. Consequently, the five-easy-pieces approach
would also eliminate tax incentives for U.S. companies to
The five incremental amendments to the current tax code that
would begin the reformation process and simultaneously give
the economy an immediate boost are: (a) lowering marginal
rates (including capital gains tax rates); (b) eliminating
the double tax on corporate earnings; (c) accelerating depreciation,
ultimately to the point of 100 percent first-year expensing
for business capital investment; (d) expanding the Roth IRA
to all personal saving; and (e) excluding export and other
foreign trade income of American companies from tax in much
the same way that other countries already do in the world
marketplace . . ."
-- "Tax Reform in Five Easy Pieces," Washington
Times by Jack Kemp, 12/5/02
"Crossing the Tax-cut Divide"
". . . Of course, key White House decisionmakers, including
the president, have not yet weighed in. As is the case in
so many areas, Vice President Dick Cheney's view on a tax
package will be crucial. Mr. Cheney's top staffers are enthusiastic
about broad-based tax cuts. In fact, they like Ernest S. Christian's
"five easy pieces" proposal that is now circulating
Mr. Christian, a veteran Washington tax reformer, believes
fundamental reform encompasses lower marginal tax-rates, 100
percent first-year expensing of business-equipment purchases
and a major expansion of Roth IRAs that permit after-tax savings
deposits that are never taxed again. The other two pieces
of his plan include a reduction in the double tax on corporate
dividends by equalizing the treatment of debt and equity,
and measures that would exclude U.S. exports from double taxation
overseas. . . ."
-- "Crossing the Tax-cut Divide," Washington
Times by Lawrence Kudlow, 11/24/02
"The Tax Man Goeth"
". . . But a drumbeat of proselytizing by economists
and academics is nevertheless pushing the idea that the corporate
levy just isn't working. 'The rules are arcane, archaic, and
nonsensical,' says Ernest Christian, a Washington attorney
and Ford administration tax official . . . ."
" . . . Part of the problem with the corporate tax is
that benefits for specific industries and companies have created
a labyrinth 'beyond the mind of man to comprehend,' says Christian
. . . ."
"The Tax Man Goeth," U.S. News & World
Report by Leonard Weiner, 8/19/02
"He's Deep in the Heart of Taxes"
"'The present tax system borders on being absurd.' Ernest
S. Christian says with an air of authority. 'It is very interfering,
it is economically irrational and it tends to represent most
of the bad things that our people are reacting to' in their
beef against Washington . . . ."
" . . . Christian recently withdrew from his longtime
partnership in the Washington law and lobbying firm of Patton
Boggs to open his own shop. And he brought with him an important
client to which he is devoting an increasing share of this
time: the Center for Strategic Tax Reform; a Washington-based
advocacy group . . . ."
". . . And he's the primary author of a "prototype"
tax system for businesses and individuals that was recently
published as a 92-page special supplement to Tax Notes, the
trade bible of tax policy wonks. The article drew an invitation
for Christian to present his views at a Harvard Law School
seminar . . . ."
" . . .'I think Ernie sees himself more as a tax theorist
and policy guru than as a straight lobbyist,' William Morris,
a veteran Washington lobbyist at the law firm of Rogers &
"The rarified environment of Harvard Law School is a
long way from Gonzalez, Texas, a small town some 60 miles
southeast of San Antonio where Christian was born in 1937.
His father ranched a few cows: Christian said that he was
'probably' the first family member to attend college. He received
both his college and law school diplomas from the University
of Texas (Austin)."
"Christian hungered for a career in politics - in college,
he'd been president of the Young Democrats group on campus.
(He long ago shifted loyalty to the Republican Party.) But
after leaving law school, he became immersed in the world
of corporate tax law in Washington - a world he has never
really left, except for a stint in the Treasury Department
during the Nixon and Ford Administrations."
"At the Treasury Department, Christian got to know a
fellow Texan, the legendary Charls E. Walker, with whom he
later joined forces in lobbying battles on such issues as
"An important ally these days is Barry K. Rogstad, the
president of the American Business Conference, a lobbying
group in Washington. Rogstad has hired Christian to do work
on behalf of USA Alliance, a new lobbying coalition he formed
to advance the Nunn-Domenici proposal. Christian has 'an extraordinary
knowledge of the corporate income tax and how the income tax
system works - best of anyone I know,' Rogstad said."
"Also working with Christian and USA Alliance in the
push for tax restructuring is economist Rudolph G. Penner,
a former director of the Congressional Budget Office. Penner
was an adviser on the Tax Notes paper and has been invited
with Christian to appear at the Harvard Law School form. "'For
a poor country boy from Texas, I was quite honored' to get
the invitation, Christian said . . . ."
". . . In his mind, the complaints of his corporate clients
against the tax system echo the populist protests of ordinary
citizens. The revolt against government has put a bounce in
his step. 'I think, frankly, we have already crossed the Rubicon
about whether we are going to restructure the tax system,'
he said. 'The answer is yes.'"
-- "He's Deep in the Heart of Taxes," National
Journal by Paul Starobin, 4/8/95