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The last time this country had major tax reform was almost 25 years ago, in 1986. Could the national deficit commission’s proposals for tax reform result in major change, or will they end up consigned to the history bin of tax ideas that went nowhere?

As everyone knows, taxes are already in flux this year with the debate over whether to extend the Bush tax cuts or let them expire, and especially whether they should be extended for the richest Americans. But the tax issues under discussion—as hotly debated as they’ve been—are minor compared with the bold tax reform proposals released Wednesday by the national deficit commission co-chairs Alan Simpson and Erskine Bowles.

Simpson, the former Republican Senate leader, and Bowles, who was White House chief of staff under Bill Clinton, propose three scenarios for taxes, starting in 2012. In two of them, the overall tax burden would rise, while marginal tax rates would decline. (In the third they call on Congress to make changes by 2013, or face the prospect of automatic increases.) To get there, they’d get rid of some or all of what are known as “tax expenditures,” those credits and deductions—like the popular mortgage interest deduction—that favor some taxpayers over others.

In one of their three scenarios, for example, they’d eliminate all $1.1 trillion of these government tax preferences, and lower the marginal tax rates to 8 percent, 14 percent and 23 percent. That scenario also puts investors and wage-earners on parity, getting rid of the favorable tax rates for capital gains and qualified dividends.

The tax increases would, therefore, hit wealthier taxpayers—who itemize their deductions and gain from the preferential investment tax rates—harder than the middle-class. Roughly two-thirds of Americans take the standard deduction rather than itemizing.

Whether these proposals result in reform, as occurred in 1986, or get tossed, as did those of President Bush’s tax reform commission five years ago, is unclear. For the commission to even send anything to Congress, it needs the approval of 14 of its 18 members, something that some smart prognosticators are betting it won’t get.

To better understand the tax side of the commission’s proposal, it’s worth looking back at the 1986 tax reform. To do that, we called Joel Slemrod, a professor of business economics and public policy at the University of Michigan business school, and co-author of Taxing Ourselves: A Citizen’s Guide to the Debate Over Taxes. What follows are excerpts from that conversation:

How similar is this proposal to 1986? It does seem that the guiding principal of the tax part of this is similar. The three components of a classic tax reform strategy are to lower rates, simplify the code, and broaden the base. That informed the 1986 tax reform. There hasn’t been a serious national debate about revisiting that strategy since 1986, so we’ll be at the 25^th anniversary.

Do we stand a chance of getting major tax reform? I don’t claim to have a crystal ball about what’s going to happen, but I don’t sense among the public any demand for base-broadening. There’s always demand for lower rates, but the other part of that is to broaden the base. I don’t sense anybody saying, ‘we’ve got to cut back on the mortgage interest deduction.’ The discussion about ending the deduction that goes to your health plan was around when we had the big healthcare debate, and it didn’t make it through. So I don’t see where the momentum is….If it does start to be taken seriously it would be time to re-read Showdown at Gucci Gulch. That was all about the tax reform in 1986, and the deals that were made to get it. The politics have changed somewhat since then, but not completely.

Is it overall good policy to lower tax rates and broaden the tax base? If you ask me up or down, broadening the base is a good thing. Full stop. Then, whether you want lower rates or not, we’re back to the question of whether we need more revenue. If we didn’t need revenue, we should lower the rates as much as we can. The thing is, we need revenue. The level at which the rates should be set has got to be part of the broader discussion about the path of the deficits and the economic impact of that.