Saturday, May 9, 2009
Neil H. Buchanan (George Washington), Stasis in Tax Policy:
In my post on Tuesday of this week, I discussed the Obama administration's recent proposals to change the taxation of foreign-earned corporate income. I concluded that the emerging debate about those proposals demonstrates that we might have reached the point where no tax policy changes are politically possible except those that make absolutely no one unhappy. Today, I will expand on that argument to suggest that the problem of political stasis has its roots in two basic phenomena: (1) Anything that can be called a "tax increase" is now political poison, and (2) It is always possible to oppose a tax increase by looking only at its possible negative consequences, ignoring the possible benefits of the tax increase as well as the possibly worse consequences that might follow if we reject the tax increase at hand.