• This is a partial transcript from "Your World with Neil Cavuto," February 16, 2005, that was edited for clarity.

    NEIL CAVUTO, HOST: The president's tax reform panel (search) meets for the very first time, but will his blue chip group streamline the mind-numbing process we call taxes? At least doing our taxes?

    Let's ask the chairman of the committee that's looking into changing all of that, the former Florida Senator, Connie Mack. Senator, good to have you.

    CONNIE MACK, CHAIRMAN, PRESIDENTIAL ADVISORY PANEL: Thanks, Neil. Good to be here.

    CAVUTO: You know, I know this is a dumb question I ask many senators, so this idea of simplicity, putting all of your taxes and filing them out on an index card. Are we ever going to get to that?

    MACK: Well, listen, it's a day that we all hope we're going to get to. It's something that we certainly would be shooting for. Whether we can actually get it down to that degree, you know, that's quite a challenge.

    But again, the issue here is if, in fact, we can make this simpler. Everyplace I go throughout the state up here in D.C., that happens to be the first thing that's on people's minds.

    And people who have quite an education, that are attorneys, CPAs, say that even today they can't do their own taxes. And some of them say that without a computer, they couldn't get it done. So everybody understands this is too complex, and it needs to be changed.

    CAVUTO: In part of simplifying tax you have to get rid of either tax breaks or benefits and certain decrees and provisos and all that. And I'm wondering whether reform will ultimately mean we do away with the mortgage interest deduction, we do away with real estate tax deductions, we do away with charity deductions. What do you make of that?

    MACK: Well, let me put it in context of how we're going to deal with this. Part of what the president had to say to Senator Breaux and I when we began this was you need to be sensitive to some things with respect to the present code and that is charitable contributions, home ownership.

    But I read from the president, though, that he didn't say to us you've got to take that off the table, you can't discuss it. So, we're starting out from the perspective that everything is going to be looked at.

    We've got nine members of the panel, so obviously, there are going to be people with different opinions, but we intend to take a very broad look at this, and not start out the process by saying that there's some real sacred cows here.

    CAVUTO: But are there? I mean, the president seemed to indicate, sir, and I don't want to put words in his mouth, that when it came to that mortgage interest, that that was almost sacrosanct. Was I just misreading that?

    MACK: Well, no, I didn't mean to imply that I wasn't going to pay attention to what he said. He clearly said to us that we have got to be sensitive to those three areas, if you will.

    But there may be other ways that you can address those questions without doing what we presently do in the tax code. And we'll just have to wait and see if we have some alternatives that are presented to us that give us that option.

    CAVUTO: Do you think, Senator, that the administration sort of is dragging the cart before the horse, that maybe in this push for Social Security reform, maybe the simpler thing -- simpler is not the word -- but the thing to do now is really reform taxes first, then look at Social Security?

    MACK: Well, the reality of the situation that we find ourselves in is that Social Security is the issue that is being focused on by the administration, and the president, and that clearly is the president's prerogative.

    But in our conversations with him, he made it clear to us his very strong commitment to tax reform. And so I think that again, we just have to move forward with the cards that have been dealt to us, and tax reform is what we're going to focus on.

    The Congress and the administration will be moving forward on the Social Security issues, and we will do our best to present to the secretary by July 31 some alternatives for the administration to look at with respect to tax reform.

    CAVUTO: Real quickly, sir, is it fair to say we will still have a progressive tax code? This idea of a single tax rate, that's out the window?

    MACK: I'm not going to say anything is out the window. I believe that there are ways to address the issue of progressivity even with a single rate. So I think that progressivity is something that is part of everybody's viewpoint, if you will, on tax issues. But there are different ways to go about it. And we will look at those.

    CAVUTO: All right. Senator, thank you. Always good having you. Connie Mack, the former Republican, who's going to be the point man on this whole tax change, whenever it comes to pass. Thank you, Senator.

    MACK: Thanks, Neil.

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