By Tom Giovanetti
Probably no single act of Congress would have a more beneficial impact on the U.S. economy than the right kind of fundamental tax reform.
Now, of course, there are differences of opinion about exactly what the “right kind” of tax reform would be, but if it’s designed to encourage businesses to invest and create new jobs, it pretty much has to 1) free up new capital for companies to invest in jobs creation, and 2) give corporations a reason to repatriate their stranded overseas profits.
If tax reform doesn’t achieve those two goals, whatever else it does is probably not worth the effort, and in fact might actually be harmful—like a tax increase.
That’s why it was such a disappointment to see Obama use tax reform as little more than a diversion. In a political bait-and-switch, the president essentially said, “Look, I’m proposing tax reform! But now let’s talk about the new federal spending I want to do.”
And indeed, he revealed (to no one’s real surprise) both higher taxes and higher spending to be his real goals.
In other words, Obama’s proposal is not a compromise between the president and Congress; it’s a twofer for the president. As the Wall Street Journal put it, “If Congressional Republicans agree to a corporate tax increase, he will agree to spend more money on his favorite public-works projects.”
The president knows by now that higher taxes and higher spending are off the table. Is his proposal a clever political strategy designed to somehow paint his opponents as obstructionists in order to aid his party’s chances in the 2014 mid-term election? Did that work in 2010?
Or is the president really left with nothing but recycled rhetoric from the past five years?
Neither option befits the office of the president of the United States during an economic crisis. And both options are depressing.
Politics aside, no country wants to see its leader flailing. The country is facing enormous problems and a known perilous future, caused by the poison of high government spending and a counterproductive tax code. It is pitiful that our political leaders are apparently incapable of recognizing the certain danger and taking the obvious steps to address the problem, and depressing that the President is demanding more arsenic.