Tuesday, December 4, 2012
Fiscal Times: Treasury Needs a Tax Expert, Not a Wall St. Banker, by Bruce Bartlett:
With the virtual certainty that Treasury Secretary Timothy Geithner will be leaving his post shortly after the new year, there is much speculation about who might replace him. At this point, I think it makes more sense to focus on the sorts of qualities the next secretary should have, rather than speculating on personalities just because they are being bandied about in the media. ...
[T]ax policy has historically been one of the Treasury secretary’s primary areas of focus. But that has changed over the last 20 years, as various secretaries have taken more interest in banking, finance and international economic issues. During both the Bill Clinton and George W. Bush administrations, Treasury ceased to be the lead agency on tax policy. The White House tended to signal general ideas about tax policy to Congress and then let it work its will.
An important consequences of this laissez-faire policy has been that the tax code has become unbelievably screwed-up as new tax provisions became layered on old ones, the interactions between old and new provisions were ignored, the administrative aspects of tax policy took a back seat to scoring cheap political points, and Treasury’s recommendations for legislative fixes to various tax problems were routinely ignored by Congress year after year.
I would emphasize that this is a bipartisan problem and has been a problem under both Republican and Democratic control of Congress. But the price has been heavy, which is why there is so much pressure to enact meaningful tax reform.
In Barack Obama’s second term, I believe that tax policy will be the Treasury secretary’s main concern. The president has a strong desire to raise tax rates on the rich and all serious budget experts know that higher revenues are essential to solving our long-term fiscal problem. And, with luck, tax reform may also be on the agenda.
For these reasons, I hope President Obama looks beyond the usual Wall Street banker-types when choosing a replacement for Mr. Geithner. I think he needs a tax guy; someone steeped in the intricacies of the tax code with long experience in tax policy.