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We All Want Tax Reform

2011 January 21
by Henry Casey

Fewer than three weeks into the New Year, how are your tax returns looking? Unless you’re Ned Flanders, you probably haven’t even thought about that annual nightmare yet. While fixing this integral element of the American experience should be a key part of Barack Obama’s State of the Union speech, the White House, owing to political hurdles, may decline to commit to this idea.

Obama should attack the tax code head-on for the exact reason that Matt Yglesias doesn’t want him to: because the Republicans will go at him for it. Pursuing this new initiative would pit the GOP against tax reform, which is politically insane, the equivalent of being against the three-day weekend. In the rush to have fair and balanced coverage, the media would try to make the arguments against tax reform sound reasonable. With false narratives peddled by their opponents, the White House is going to have to learn the mistakes of the Health Care reform debate.

This conversation started back in the Spring 2010 issue of the journal Democracy: A Journal of Ideas, with an article by friend of The Busy Signal‘s editors Ethan Porter. Now we are nearing the 2011 State of the Union, and the debate has taken root: many are discussing whether or not President Obama needs to take on the tax return. It’s not hard to see why this is a cause he could take on: there are few things more people think needs fixing than the tax return.

Politically, placing this argument in the State of the Union is smart, because time is running out until the 2012 campaign. If and when Mitt Romney lands on the Republican ticket, he will use his history in the private sector to argue that he—and not that constitutional law scholar in the White House—knows how to fix the tax code.

Given the GOP’s claim to being the party of deficit hawks, Obama needs to be at the vanguard of the tax debate, attacking the right’s supposed strength to reveal it a weakness. The Democrats only need to point to two wars and the Bush tax cuts for the rich to get the upper hand when it comes to the mantle of fiscal prudence and credibility.

The initial framing of the debate isn’t the only concern, nor is it even the greatest. The White House and the Democrats need to ensure that Transparency is more than just a buzzword this time around. The new paperwork that Americans will encounter should be front and center throughout the debate. If their forms and returns are well enough designed, as not to be intimidating, we could witness a much-needed relaxation of people’s fear of the government.

Those who want government to reduce what it does—and it’s safe to say that this group isn’t limited to the “Obama Is A Nazi” wing of the Tea Party—are tired of feeling that they lose power every year around tax time. If Obama allows the public to feel a bit of power in its hands, the benefits will prove numerous, and his popularity will skyrocket.

The next potential misstep for reform lies in timing. The Democrats would sabotage this political boon if, as with health insurance reform, they allow a long intervening period before the changes go into effect. Rather, they need to act with a sense of immediacy. From day one, from The State of the Union, President Obama needs to show the public specific details about what this reform will look like and how it can help small businesses grow. If the Democrats start off strong, it will be hard for a stretch of time like August 2009 (which saw riotous anger disrupting town halls) to overtake their drive for reform.

Arianna Huffington appeared on last night’s Countdown with Keith Olbermann to talk about the pro-corporate language President Obama used in his recent editorial in the Wall Street Journal. She discussed how Obama should be taking on loopholes in the tax code, rather than sending out staffers on a witch-hunt for regulations that hurt businesses. There’s value in his announcement, though, at least potentially. It works across the spectrum, earning political capital, if his team emerges with some evidence that it has helped businesses whose names don’t rhyme with Oldman-Sacks. The fact is that many important regulations aren’t actually being implemented. In addition to closing loopholes, the White House needs to do some work to show that good regulations are still in place. Critical regulation of the oil industry was being ignored when when “Deepwater Horizon” went from potential-name-for-a-Bond-villain’s-lair to most-recognizable-clusterfrak-of-2010.

The only people who oppose tax reform are the businesses that exploit those loopholes and H&R Block, which makes it’s money off of the tax code’s indecipherability. A victory on tax reform will require casting them as the villains, the ones not contributing enough to society, shifting the tax burden to ordinary Americans.

Since the right attacks Obama for everything down to what side of the bed he wakes up on (the left side of the bed was Lenin’s favorite, according to Sarah Palin’s Facebook wall), Obama would do better to draw attacks while being proactive than waiting on a topic that will, sooner or later, overpower more than a couple news cycles.

Henry Casey has previously written about the tenuous relationship between Obama and his base.

Henry is also really excited for the return of Parks & Recreation.

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