In the tussle between Tom Coburn and Grover Norquist, I think you have to come down on Coburn’s side. The Oklahoma senator says closing tax loopholes is a step on the road to fiscal sanity; the viscerally anti-tax Norquist says closing a loophole is a tax increase and he’s against it on principle.
Both men are conservatives; the question is a current bone of contention within the Republican party. Let’s take a look at the principles. Norquist is consistent in his opposition to big government and the taxes that fuel it. He favors the starve-the-beast approach, in which you cut off revenue and force the government to downsize.
Fine, except it doesn’t work that way. The spending machine keeps running and you just get deeper into debt. You have to expend political capital on attacking the roots of the spending culture. That’s where the real debates and the tough, principled choices have to be made, in defining the legitimate functions of government and eliminating the illegitimate ones. Cutting taxes and calling it a day isn’t enough: that’s the lazy man’s way of trying to limit government.
No doubt Norquist also favors attacking the spending. But he’d win more converts if he didn’t appear to be defending even the most egregious tax breaks. Politics is all about compromise, and closing loopholes is something that appeals to both sides of the aisle. It’s a fiscal fix that is politically relatively easy, and that’s nothing to sneeze at in a fiscal emergency. The short-term boost to revenue will help stem the momentum of the deficit, and once everyone’s paying what they owe and the true tax burden is apparent, we can set to work bringing our high corporate tax rates down to appropriate levels as the fiscal crisis eases. Close the loopholes and lower the rates is a formula that will fly, politically. Coburn’s right on this issue.
Thoroughgoing reform of the tax system is good sound policy just for its own sake: our federal tax system is a resource-wasting, enterprise-killing, demoralizing disgrace, a fetid sump of corruption. Radical tax simplification ought to be an urgent issue for both parties; if it’s not, we need to ask our representatives why not.
Labels: tax loopholes