Tax Reform

…with a Republican Congress and a Democrat President.

[W]ith Barack Obama in the White House and enough Democrats in the Senate to uphold a filibuster, Republican lawmakers are quietly playing down any hope of comprehensive tax reform and instead have set their sights on just the corporate portion of the tax code.

The GOP favors a simplified tax code with a lower, but broader, tax base.

That proposal is a nonstarter with Democrats because while it would reduce taxes overall, it would draw tax revenue from more people on the lower end of the income spectrum.

Never mind that with skin in the game, “people on the lower end of the income spectrum” would take their political responsibilities more seriously, which, far from leaving them their current Democrat rubber stamps, would work to the good of the nation.

The tax cut deal Congress passed “doesn’t have the shelf life of a carton of eggs,” [Senator Ron, D-OR] Wyden lamented before the Senate adjourned.

Wyden is right to lament this, though perhaps not for the reason he thinks: temporary fiscal measures do not have any effect on businesses or the economy other than suppressing both as the businesses await the uncertain outcome of the end of temporary measures.

Congressional Republicans have come to realize that even though they will control both the House and Senate in 2015, they won’t get far on tax reform unless they do so in concert with the president.

In other words, the GOP isn’t planning on passing its own bill for Obama to reject.

Said one top GOP aide close to the Senate talks, “There is only so much that can be done without the White House involved.”

Simply giving up, though, would be a mistake, and it would play into the hands of critics who say the Republican Party has gotten too used to losing and no longer knows how to win in Congress. “Needing” the President’s cooperation and that of enough Democrats to pass a cloture vote, though, actually is good for Republicans: it would help them emphasize the differences between them and Democrats, and it (re)identify the Republican Party as the party of low taxes and the Democratic Party as the party of big spending, the party of you can’t have anything if I can’t have my big taxes, the party of No.

“Only so much that can be done” is true, and passing lesser reform is a fine fallback. However, Republicans need to force votes—even if they’re failed cloture votes in the Senate—on full, wide-ranging, complete tax reform in order to put the Democrats, individually and collectively, on the voting record: either those Democrat Senators are for reform, or they’re for the Party of No. Either Obama signs, or he vetoes as a leading member of the Party of No.

In fine: pass the broad reform bills, anyway: force the votes, and if it gets far enough, force Obama to veto. Then bring the failed bills up again the next year, and force and force the votes and the veto again—in an election year. Some Republican staffers worry that this year is it because in an election year, too many politicians will be worrying about their election campaigns. These staffers corroborate the criticism regarding not knowing how to win. Election years, especially the one coming up, is when the Republicans will have the most leverage—if they can find the courage to apply the pressure.

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