Alan Simpson: Eliminating tax expenditures is NOT a tax increase
Kari Chisholm
Last week, while on the road to Netroots Nation, I spent a bunch of time in airports. In Denver, it seems the channel of choice is CNBC. I caught a brief interview with former U.S. Senator Alan Simpson (R-Grouchy). Now, Simpson's a guy with a long history of being a cantankerous and blunt conservative. Certainly, not a guy that I'd ever support for anything.
And yet, there he was, the conservative co-chair of the national debt commission, explaining that of all the deficit-cutting measures that he supports - which include drastic cuts to Medicare, Medicaid, and Social Security; cuts to social programs; cuts to defense spending; cuts to higher education funding; and much more - what's his number one priority?
Q: To what extent do you feel that some of your findings and recommendations will be in the final plan? And if you had to pick, say, one or two only of the things you've recommended, what would you like to be included?
That has to be tax expenditures, for god's sake! There's one trillion, one hundred billion of them. There's no oversight over them, no nothing over them.
To have people on the other side like Grover Norquist say that if you get rid of all those tax expenditures it's a tax increase, that is total duplicity and deception. They are spending by any other name.
You can get that one trillion, one hundred [billion] out - use some of it for deficit reduction and then give flat tax reform with the rest of it. Everybody seems to like that.
That's right, folks. To all those conservatives, in Oregon and around the country, who like to claim that eliminating tax deductions, credits, exemptions, and loopholes is a "tax increase", here's Alan Simpson saying that that's entirely bunk.
Frankly, I've never understood why so many conservatives support these tax breaks. After all, if they're for a free market free from government intervention, why support corporate tax loopholes that pick winners and losers, reward lobbying prowess over economic efficiency, and distort the free market?
In Oregon, we've made a few positive strides in recent years - setting sunsets for deductions, for example. But we should go further, set sunset for tax credits as well - and make sure that we're actually letting 'em expire, rather than merely rubberstamp renewals and extending sunsets further.
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5:37 p.m.
Jun 24, '11
And the same folks who want to call the elimination of a tax break an increase, also want to discuss tax levels by comparing rates rather than taxes paid. In other words, those breaks don't count when you're comparing tax burdens, but they're a real entitlement if you talk about taking them away.
10:37 p.m.
Jun 24, '11
An excellent point, Sue.
7:24 p.m.
Jun 24, '11
I haven't seen a complete scorecard, but I thought the legislature did a pretty good job reviewing the expiring tax expenditures. No?
10:37 p.m.
Jun 24, '11
As I understand it, they've put sunsets on the deductions, but not the credits and exemptions - and yes, they did a pretty good job holding the line this year on renewing the sunsetting deductions.
7:28 p.m.
Jun 24, '11
The Republican strategy is to take the debt ceiling negotiations to the brink and see if Obama and the Democrats blink first by agreeing to an all spending cuts, no tax increase, no loophole closing deal. They have nothing to lose by doing so, and everything to gain, since there is a good chance Obama and Democrats will capitulate. Obama cares more about keeping the economy out of recession than Republicans, since his re election hopes hinge on the economy performing well, while their chances improve if they cause the economy to enter another recession.
Republicans will stop at nothing to force the poor and middle class to bear all the pain and cost of balancing the budget, while holding the rich harmless. To them, winning the next election is more important than what is best for the country.
Democratic interest groups will put pressure on Obama and Democrats to give in and capitulate, to prevent a catastrophe that will hurt the poor and middle class more than the rich.
10:38 p.m.
Jun 24, '11
It's enough to make you slam your head against the desk, isn't it?
10:11 a.m.
Jun 25, '11
It frustrates me to no end that the Republican leaders always seem to out be better at political strategy and negotiations than the Democratic leaders. Republican leaders seem to think through their strategy months and years ahead of time, while Democratic leaders just react and focus only on the crisis of the moment, without much thought to longer term strategy. Certainly no longer than the next election at most.
10:30 a.m.
Jun 25, '11
I don't think that it's entirely an inability on the part of the Ds to be strategic or tactical thinkers. Our guys are just as smart as their guys.
Rather, we've long had an operating majority in Congress for priorities more in line with conservative priorities than progressive ones - even through the Democratic majorities.
At some point, you have to assume that the outcomes aren't the result of tactical errors, but the actual net position of the legislative body.
1:24 p.m.
Jun 25, '11
Of course, there's an alternative view, stated cogently by Nate Silver.
10:57 a.m.
Jun 26, '11
And then there's the retort to the alternative view, stated cogently by Matt Yglesias.
12:31 a.m.
Jun 28, '11
I agree with both Nate and Matt. Matt is right that it's harder on the National level. But you can still use the strategy and approach Nate is talking about. Maybe it takes longer. You are confined by the groundwork that was done, or not done, years ago.
But I'm not talking about short term strategy about passing individual legislation. I'm talking about overall long term political messaging that spans election cycles and presidential administrations.
12:16 a.m.
Jun 28, '11
I think there is probably a reason that "we've long had an operating majority in Congress for priorities more in line with conservative priorities than progressive ones". I don't think that's just an accident.
3:11 p.m.
Jun 28, '11
The telling blow is seeing what they want to cut. Medicare & Social Security. Discretionary spending on programs that help people. But if you talk about reducing military spending, closing tax loopholes, or gasp a tariff, then you'd think you would have asked them to cannibalize babies.