Adding Complexity To The Tax Code

Jan 25 2012 @ 12:14pm

Howard Gleckman analyzes Obama's proposals to further complicate taxes. His bottom line:

I suppose it is inevitable that a president beginning his fourth year in office and facing a deeply divided Congress would go small-bore. After all, there will be no fundamental tax reform in the current environment and even proposing such a step would only open him to criticism from the usual suspects in housing, non-profits, finance and other industries that are very happy with the system as it is.

Still, it is a shame that, instead, Obama would make things worse.

In my view, he needed one big domestic initiative in his first term to balance healthcare among Obamacons and Obama-Indies. Tax reform was an obvious choice, and he was given cover by Bowles Simpson. Would it have happened? Almost certainly not. Will many of Obama's countless little tax breaks pass? Almost certainly not. The point of tax reform was to stake out a position and remind us that he's not a standard-issue liberal.

He punted. And punted. And punted. His response? The argument that he put out a proposal last September that he didn't highlight and that no one read. Sometimes, his pragmatism is almost pathological.

But there's something else here. Sweeping tax reform removes much government meddling in the private economy. Since Obama seems now to want industrial policy directed from Washington, tax reform would hurt. But my main interpretation is that he couldn't bear being trashed by all the various special interests involved. And the data supports a populist re-election strategy.

I understand that. But let us be clear: more tax breaks is not change. It is much more of the same things that Americans are sick of.