Tax policy

The two parties should not politicize a decision on which they largely agree

Stung by recent unemployment numbers, the president is once again pushing Congress to extend tax cuts for people who earn less than $250,000 a year, while allowing tax cuts for more affluent individuals to expire.

“Let’s not hold the vast majority of Americans and our economy hostage while we debate the merits of another tax cut for the wealthy,” Barack Obama said Monday.

Thanks. We appreciate that.

But lately it seems as if hostage-taking is what politics is all about. Investors and ordinary taxpayers wondering about policy, student-loan borrowers, Senior citizens and future Social Security recipients, people whose unemployment compensation was about to run out, government workers wondering what would happen to their jobs when the debt ceiling was reached, wondering whether Obamacare would survive to benefit them or would hang on to cost them money they didn’t have, Coloradans waiting for civil unions to be voted up or down, under-equipped federal firefighting forces – their collective uncertainty adds up to a nation of people unable to make long-term plans with any degree of confidence.

Part of the problem is the tone of political campaigns. Candidates intone,“Elect me, or the middle class is history,” while the middle class is trudging into history.

Mitt Romney’s campaign countered Obama’s posturing by calling the president’s proposal a tax increase and insisting that the president “doesn’t have a clue how to get America working again and help the middle class.”

Romney favors extending all the current tax cuts, including those for high-income individuals. If Democrats don’t go along with that plan, Romney’s spokespeople will soon be accusing them of – drum roll – holding the middle class hostage.

Voters don’t know where to turn. They’ve been fooled before. More to the point, they’ve seen economic plans fail despite the convincing and sincere rhetoric of well-intentioned politicians.

A second component of the problem is a political system designed to create winners and losers, both trying to obstruct the other. The quality of an idea is secondary to its ownership, because ideas primarily are viewed as weapons in the perpetual power struggle. Bipartisan – or better yet, nonpartisan – cooperation is discouraged.

Little progress is made. No plan is allowed to reach fruition before its opponents declare it a failure and launch their own, refusing to retain and refine good ideas tainted by association with the “other” party.

Tax policy should not be equated with political strategy. The goals, logically, should be different. Until they’re separated, the nonsensical U.S. tax code will continue to be so convoluted that compliance is difficult and loopholes abound. It, too, is held hostage to election-year rhetoric.

The American people deserve a fiscal plan that works well year after year, not one at risk of being changed annually as power shifts. They deserve to know their 2013 tax rate in time to plan for it. They deserve a government that makes decisions in a timely manner based on the best interests of the nation, not based on political calculations of risk and benefit for an upcoming election.

Here’s an idea. Release the hostages. Pass the tax cuts that both parties favor. Take them off the table, and then take up the debate about tax cuts for the wealthy.