Saturday, August 05, 2006

Structural Fiscal and Tax Issues Must Wait Until After Midterms

With the conglameration tax bill (estate tax cut, minimum wage raise, tax incentive extension) bill floundering, important issues such as tax simplification, tax reform and deficit reduction have been put on the back burner until after the election. John Breaux, chairman of the President's Tax Reform committee last year, thanked the Senate Finance Committee for providing a hearing but criticized Congress as a whole for hiding from the issue. Former Treasury Department offical and tax policy expert Eugene Steuerle, who asserted that the potential political gain from tax reform often is perceived, especially in tight elections, is not worth the risk. Meanwhile, GAO Comptroller David Walker weighed in on deficit issues, claiming that the ability to fund needed programs in the future may be at risk. Indiana University's William Kulsrud sought to combine the structural changes, arguing for a two-pronged attack on tax complexity and the deficit.

It is hardly unusual to hear people in the news cite government timidity. At the same time, it IS an appropriate time to face tough issues such as tax reform, Social Security reform, etc.--and doing this immediately after an election minimizes accountability. Perhaps this makes sense from a Congressperson's self-interest, but it also reduces the likelihood of quality structural improvement.

UPDATE: Kerry Kerstetter at


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