Tuesday, August 09, 2011





Pining For Tax Reform


Oh, for goodness sake. He's doing it again.


One striking example of this rightward shift came in last weekend's presidential address, in which Mr. Obama had this to say about the economics of the budget: "Government has to start living within its means, just like families do. We have to cut the spending we can't afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs."

That's three of the right's favorite economic fallacies in just two sentences.

No, the government shouldn't budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump.

Spending cuts right now wouldn't "put the economy on sounder footing." They would reduce growth and raise unemployment.

And last but not least, businesses aren't holding back because they lack confidence in government policies; they're holding back because they don't have enough customers -- a problem that would be made worse, not better, by short-term spending cuts.

That's three of the right's favorite economic fallacies in just two sentences. Whether President Obama believes it or not- it's hard enough to believe a half-aware human being hasn't noticed that families borrow and go into debt- he does parrot Repub talking points. And he's doing it again.

After defense secretary Leon Panetta argued that additional revenues should come from higher taxes and cutting entitlements rather than by reducing defense spending, a peturbed Barney Frank (D-MA) asked the President to repudiate the Secretary's position. Instead, the President on Monday maintained

What we need to do now is combine those spending cuts with two additional steps: tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.

The good part- relatively speaking of this two-pronged approach is "tax reform that will ask those who can afford it to pay their fair share."

But not really. In March, he lamented that consensus on "fundamental tax reform will take time." In early July he asked, and answered, his own question: "Do we believe tax reform is necessary? I would say absolutely." Soon after that, he called for "sweeping tax reform that creates a level playing field" and was promptly attacked because "It's not tax reform."

The "he" would be, respectively, House Majority Leader Eric Cantor, Texas Senator Jon Cornyn, Senator Tom Coburn of Oklahoma, and the spokesman for Americans for Tax Reform. All Republicans- and all demanding "tax reform," as does President Obama, although (characteristically) in his case, it's a polite request. (Presumably, the spokesman for Americans for Tax Reform is a Republican but in either case, you get the point.)

Again, President Obama spouts GOP talking points, trying to build consensus for "tax reform," which means something very different to most of the individuals- Republicans- employing the phrase. The most least unreasonable on taxes of that group, Coburn, is the same guy who (temporarily) walked out of the Gang of Six negotiations because the group opposed slashing Medicare benefits but voted for the Ryan budget plan, which would have slashed tax rates for the wealthy.

Tax reform might end up looking more like most Democrats, and perhaps Obama would like than what practically all Repub politicians would like. Tomorrow, Orrin Hatch might become a Democrat, it may snow in Texas, and the sun may rise in the west. But the President is Barack Obama, who in his inaugural speech, Drew Westin brilliantly wrote in Sunday's New York Times, could

have made clear that the problem wasn't tax-and-spend liberalism or the deficit- a deficit that didn't exist until George W. Bush gave nearly $2 trillion in tax breaks largely to the wealthiest Americans and squandered $1 trillion in two wars.

And perhaps most important, it would have offered a clear, compelling alternative to the dominant narrative of the right, that our problem is not due to spending on things like the pensions of firefighters, but to the fact that those who can afford to buy influence are rewriting the rules so they can cut themselves progressively larger slices of the American pie while paying less of their fair share for it.

But there was no story- and there has been none since.




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