NOVEMBER 18th UPDATE — recommended reading from NCPA: Redefining the Goal of Tax Reform.
Who cares about the tax code in November? Heck the holidays start in a couple of weeks and we don’t have to think about federal taxes until well after the first of the year. For our discussion of outreach to the uninformed and winning public support for the right policies, tax simplification is an issue that illustrates that just because the public gets it and is with you doesn’t mean our elected leaders will act.
In early 1999, I had the chance to meet newly installed U.S. House Speaker Dennis Hastert at one of those run of the mill Republican Party events in his home district. The exchange didn’t last long as the purpose was meeting and greeting and not talking policy.
Nevertheless, I couldn’t resist the urge and said something like this: “So, Mr. Speaker, how soon will the House Republicans pass a bill that overhauls and simplifies the federal tax code?” Denny’s answer was quick and to the point: “This president won’t sign it.” And of course he was right — Bill Clinton wasn’t going to betray the tax lawyer and tax accountants lobby.
But that really wasn’t the point of the question. Implied was the basic idea of bringing attention to the issue and thus increasing public support for and pressure on congress and the president to act. House Republicans today pass a lot of bills Obama would never sign so the idea wasn’t radical.
There are few issues that poll as well as simplifying the horrendously complicated and onerous U.S. tax code. During tax season every spring, millions of Americans struggle through the unnecessarily long and impenetrable IRS forms and spend far too much money attempting to comply. Wiser Republican Party leadership would’ve owned this issue and branded themselves as the party of tax reform. Even a lot of Democrats would have been grateful.
When Speaker Hastert got his president two years later Republicans still didn’t do anything on the issue. I don’t know about you but invading Afghanistan and Iraq and attempting to reform their way of government seems more difficult than fixing a domestic policy problem such as making tax day a lot easier for the people back home.
The tax code has only gotten worse since Hastert and President George W. Bush failed to use the power they held. Why didn’t they? After all, it wasn’t like they didn’t already have public support for the measure. There are several reasons, no doubt, but I’d suggest that a major one was that the GOP leadership lacked the vision for how to follow through and secure public support for a specific plan.
Simplifying the tax code used to be a stock campaign promise for Republicans in federal races. Today it’s low on the priority list and if it shows up at all it’s towards the bottom of any list of proposals. That’s a shame because there would be so many benefits to finally getting it done.
The tax code may be complicated but selling reform and simplification isn’t. There should be flat rates with a very limited number of deductions. There is no reason for government to be trying to encourage and discourage so many private financial decisions — which is what the code is mostly about.
It would also be a big plus if Republicans and conservatives would insist on ending the automatic deduction of taxes from everyone’s paycheck. One great way to enlighten the nation about the real size and cost of government would be to make them go online or write a check and pay their tax bill every month like they do all their other bills — allowing people to feel the pain.
Am I dreaming? Yes — but it’s a good dream and worth discussing even if it never passes. Why? Because even low information voters might begin to see how big the difference is between their gross pay and their after taxes net pay.
Up next: The private sector sees improvements in product and services advances, why can’t politics?