Clint Stretch's blog
Whatever Congress and the White House do in the next couple of weeks will reinforce the case for tax reform. The seeming sanctification of low tax rates that occurred with the Tax Reform Act of 1986 has not meant keeping top tax rates low; it has meant only the death of honesty in talking about rates. The result is a patch work of hidden rates and additional wage taxes that is likely to continue.
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As I watch the debate in Washington around “tax reform,” I can’t help but think of this conversation between Humpty Dumpty and Alice in Through the Looking Glass:
"When I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean -- neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - - that's all."
We are having a Through the Looking Glass moment in Washington as everyone throws around the words “tax reform” while assigning their own meanings to them. Ironically, this is all occurring while we seek to avoid the real possibility that our Humpty-Dumpy budget could fall off right off the cliff.
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Yesterday, Speaker Boehner delivered prepared remarks on finding common ground and averting the fiscal cliff. These remarks are being hailed in the press for their “conciliatory tone.” Some even report that the Speaker is “open to increased tax revenue.”
Here’s what the Speaker actually said:
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On Tuesday, the electorate will get to the end of a very long political process, during which they have been promised a better tax system without any real discussion about the sacrifices such a system would demand.
Regardless of the winner of the presidential election, the expectations of the typical voter are pretty much the same. Here’s what I think the voters have heard on taxes and, therefore, what they think will happen in the next Congress:
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During the August recess, my friend Jeff was camping in Glacier National Park’s back country. Late one afternoon, he set off with his camera and equipment in pursuit of some swans. As he worked through some brush for a better vantage point, a bull moose stepped into the lake not more than 75 feet from him. As a photographer, Jeff thought immediately about how lucky he was to have all the right gear with him so he could capture this unique image. As a person who was miles from any real help and the parent of three wonderful kids, he certainly also thought about whether the moose was a threat. Like so many things, how you think about a moose is a matter of your perspective.
The varying perspectives that business leaders bring to tax reform will determine the level of their support for, or opposition to, any particular reform proposal. The task for the White House and Congress will be to craft a package that satisfies a broad enough coalition of business supporters to overcome the complaints of opponents. This will not be easy.
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