Archive for the ‘Tax Reform’ Category

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SMASH THE STATUS QUO

December 5, 2010

This past week, a favorite commentator of mine from News Hour, the conservative David Brooks, wrote a column in the New York Times in which he shared his vision for how Obama could take charge of the tax code discussion and move our country forward.  As I read it, I marveled at its simplicity…and how it would help us re-think our nation’s debt and future – not through the disheartening process of compromise, but through consensus building.

Basically, he suggests that Obama issue a simple statement that positions it is not worth having a fight over a tax code we all hate…but instead, we give ourselves one year in which the Bush tax cuts remain in place, as do unemployment benefits.  But in that time, we commit to engaging in a comprehensive tax reform plan where throw out the existing code and build a new one. We eliminate loopholes, take on special interests, lower rates, and from scratch, build a tax system that works, is understood, and lowers taxes and creates jobs.

Brooks contends that this would shift attention from the big-government vs. small-government debate; shift resources from unproductive consumption to more productive investment, shift money from the affluent elderly to the struggling young, and eliminate parts of tax code that erode personal responsibility and emphasize parts that encourage responsible risk-taking.  Makes sense to me!

Brooks sealed it and earned my support when he said “…the president would lay something like this at the feet of the Republicans and ask:  Are you ready to have a conversation, or are you the party that can’t say yes?”

He ended the column with a wish for action: “Some days, gridlock seems permanent and fatal.  If only Obama would grab tax reform and use it to smash the crust of the status quo.”

WOW!   

Again, I am left thinking of other applications…maybe this is the real “trickle down” effect – from national to state to local; and along the way, we include our industry and our own personal, sometimes rigid, thinking!  That concept of Status Quo feeds right into my last conversation, doesn’t it?  I think it is the gate-keeper behind which lurks both Hubris and Fear of Change.  As I ponder this, I realize, it doesn’t matter which feeds the inaction-the real barrier is Status Quo.

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A GLIMMER OF HOPE…

November 9, 2010

This morning’s editorial pages in the Strib (other than one column of space wasted on Bachman) were filled with opinions about how the elections will impact taxes and the looming expiration of the Bush Tax cuts. 

And of course, most reflect extreme positions on either side of the issue and the continuing buy-in to rhetoric whether it is based on fact or fiction from either side.  But with a header of “On taxes, let’s get Bush out of the equation”, a column reproduced from the Bloomberg News caught my attention. 

The Bush Tax Reform was passed by the majority in Congress with an expiration date of December 31, 2010.  One has to assume, then, that it reflected the majority of the people of the United States, right? This was a TEMPORARY cut – a stimulus to keep us going as threat of a serious recession loomed ahead in the early 2000’s. 

Please don’t digress into the assumptions that the Republicans fully expected it would become permanent on 12/31/10 and the Democrats fully expected it would expire, but the only way it would get passed is to set a date far enough out in the future to give hope to both sides, that they would have enough control in 2010 to get their way.  As we know, that did not happen; so let’s just move on.

Instead of stimulating growth because of the extra dollars it put in business and consumer pockets,  the growth we experienced in this century’s first decade was brief and  based on consumer spending that exceeded personal income as America lived on credit cards and home equity loans to falsely manufacture the appearance of economic growth, as our consumption was enabled by irresponsible financial institutions.  And we all know what that led to – The Great Recession of the Bush Administration – for which we are still suffering.

It did not work, folks – just like the tax cuts in early Reagan years did not work.  Maybe we are supposed to let the country try again – so that when a third attempt also fails we can stand up like the umpire and signal, with three strikes “You’re Out”! And then going forward, have we put this battle to bed?

I think not.  Hence, Kevin Hassett’s column caught my eye, as he positioned we let the tax reform as it stands expire as planned.  And what would we have then?  AN OPPORTUNITY!

An opportunity to go forward neither defending nor attacking the inherent issues with the that temporary bill…an opportunity to start with a clean slate…an opportunity to clearly define the issue in plain terms, brainstorm possible options to alleviate the problem, and through consensus and collaboration reach agreement and common ground.   In truth, we all know we need a tax overhaul.  Wouldn’t it be simpler to accomplish if we did not have to divert our energies to defending  or attacking old baggage?   Out of a disaster, can we not mold a better way?  Isn’t that the American dream and mantra?

Hassert purports that if we start from scratch and collaborate as adults, Obama could deliver on the promise of change, and the Republicans could lock in their political gains of this election by showing voters they can govern effectively.  A WIN-WIN for the American people?    A phrase that has almost disappeared from our  vocabulary as we wrestle in this false fight to protect the past.

According to the NY Federal Reserve, somehow over the last 21 months, the American people have reduced their personal debt by almost $1 trillion!  Perhaps that new tax bill could incorporate their methods and we could not only put an end to this meaningless tax argument, but show some reduction in the national debt as well!

And wouldn’t it be music to our ears to get the ineffective “Bush Tax Cuts” out of the conversation?

I know, I’m dreaming – but all it took was that glimmer of hope to take away for a few moments the despair regarding the current situation.  So I thought I should share.