Monday, February 6, 2012
Martin A. Sullivan (Tax Analysts), Say Bye-Bye to Reform: Obama Becomes Clinton, 134 Tax Notes 631 (Feb. 6, 2012):
In economic analysis, Martin A. Sullivan discusses the similarities between the tax programs of the Obama and Clinton administrations and argues that President Obama is not committed to tax reform....
It wouldn't be so bad if Obama simply remained a lackadaisical supporter of tax reform. But his proposals are actually moving us in the opposite direction. As the election approaches, he and his advisers are feeling the need to dish out new tax breaks. So the president who on national television shouted at Congress to "get rid of the loopholes" now wants to add a bunch of new loopholes of his own....
It's not just the complexity that's awful. Obama's targeted tax breaks are also lousy economics. Defining what is qualified and what isn't can be costly from an administrative and compliance standpoint. It results in arbitrary line-drawing. One type of manufacturing gets a tax benefit while another does not. Some investments in areas with job losses get tax breaks while other productive investments get none. Some types of moving expenses are subsidized but others are not. All of this distorts economic decision-making. It's like pouring sand into the gears of our economic engine.
Like Clinton, Obama is adopting a tax program that is the opposite of tax reform. And as with Clinton, the approach is more likely to kill jobs than create them.
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