Coming from anyone else this column would read like a proposed Saturday Night Live sketch, but David Brooks is well-connected in Obama's White House. His notion? Obama needs to reclaim his relevance and set the national debate by making a bid for tax simplification and reform. No, seriously, and in time for the State of the Union:
I have a vision.
Sometime over the next couple of weeks, President Obama issues a statement that reads: “Over the past several months, Republicans and Democrats have been fighting over what to do with the Bush tax cuts. I have my own views, but it’s not worth having a big fight over a tax code we all hate. Therefore, I’m suspending this debate. We will extend the Bush rates for everybody for one year, along with unemployment benefits. But during that year we will enact a comprehensive tax reform plan.
“The plan we will work on this year will look a bit like the 1986 reform plan. We will clean out the loopholes. We will take on the special interests. We will lower rates and make the tax code fair.”
Then Obama asks his aides to come up with a tax reform proposal he can lay before Congress. The State of the Union, he knows, is the one big chance he will have to redefine himself before the American people. On the big night, Obama stands before Congress. He gestures over to a giant stack of papers. “This is our tax code,” he tells the American people. “It’s rotten and we’re scrapping it.”
Then the president outlines his own proposal. It looks a bit like the plan hatched by Senator Ron Wyden, a Democrat from Oregon, and Judd Gregg, the outgoing Republican senator from New Hampshire.
Where to start? Tax reform doesn't just fall out of the sky; Reagan and Bush made it the centerpiece of their Presidential campaigns and still had to fight like fury to get something.
Secondly, we are talking about Obama here - he has not exactly preserved the confidence of the left, so just who is he leading into this battle?
Third, although both parties engage in social engineering through the tax code, the Democrats are the party of Better Living Through Bigger Government. If I may be allowed a flashback to 2000, Bush proposed to cut taxes by cutting rates; Gore proposed to cut taxes by sprinkling targeted tax cuts on the truly deserving. Is Obama really less of a Nanny-Statist than Gore? Tax simplification is not what Democrats do. (Bush could have and didn't, which is one of my three Big Peeves with him.)
As to timing, I don't believe that deficit neutral tax simplification is ever achievable - on at least some points the classic problem of diffuse (prospective) winners and focused (prospective) losers emerge, and the focused losers derail the enterprise. Simplification can be sold when it is combined with tax cuts, thereby giving folks an opportunity to fight over whether they win a little or a lot.
But the Bush tax cuts are likely to be renewed in the next few weeks (per Brooks, just for a one year truce). In terms of packaging, Obama would have more traction if he let the tax cuts lapse, with the idea that they would only be restored as part of a tax reform package.
Well, that won't be happening. And Obama is really going to pull a plan together in time for the State of the Union in January? C'mon, Obama is the guy who turned over the drafting of both the stimulus bill and healthcare reform to Nancy and Harry; is he just going to flip the keys to John and Harry on tax reform? If the White House staff is going to deliver this by late January, they'll be needing this. And this, too, in classic form.
Frankly, the idea that Obama is going to become the champion of tax simplification would be absurd, except that it is coming from Brooks and he is cozy with various Obama staffers. If it's a trial balloon it is still daft, but it would indicate give a sense of the desperation in the White House.