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Federal budget deal must tackle tax reform

12:45 pm by | 0 Comments

US Supreme Court

The appalling tea party shutdown of the U.S. government is over, and there is not much to like about what we have just witnessed. However, it appears to have ended well, and that leaves at least some hope that the national government may be headed in a healthier trajectory.

The radical Republican minorities in the House and Senate -- who were willing to scuttle both government and the economy if it gave them leverage to change the Affordable Care Act -- were soundly defeated by President Obama and repudiated by responsible members of their own party, including Maine Sen. Susan Collins, who worked to find a bipartisan way out of the crisis.

Now, both houses of Congress have committed to bipartisan budget talks before the government runs out of money again early next year. This is an opportunity to accomplish something that both parties and most Americans agree is needed, but Congress hasn't been able to tackle politically: tax reform.

The tax code is overly complex, and there are too many loopholes and carve-outs that are available only to the very rich. American companies are rewarded with tax breaks when they move operations and jobs offshore. If Washington is serious about doing something about long-term deficits, these issues will have to be addressed.

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The tea party demand that deficit reduction means cuts and only cuts should go the way of the tea party demand that the Affordable Care Act be defunded as a price for keeping the government open. Closing tax loopholes is the most rational way of accomplishing deficit reduction.

Discretionary spending levels are already at much lower levels than they were during the Bush administration, thanks to the blunt instrument of sequester cuts. More rational spending cuts could be substituted, but that wouldn't result in deficit reduction.

Cuts to entitlements like Social Security and Medicare have been on the table since 2011, but it would be a moral and political outrage to make low-income seniors pay for deficit reduction while the wealthiest 1 percent of Americans are enjoying a greater share of the national wealth than they have at any time since the Great Depression.

There is broad agreement among most Americans that a simpler tax code with fewer loopholes would be more fair, but it has never had the political traction it needed because the same ideologues who engineered the government shutdown strategy would not consider any tax changes that raised revenue.

If those forces still have the power to stop the tax reform conversation cold, there is not much reason for hope. We urge Sens. Collins and Angus King, who will serve on the budget committee, to stand up to the ideologues and craft a budget that is rational and fair. The anti-government forces can't win if mainstream Republicans are willing to work with Democrats and independents to make the government function. If building that consensus is the outcome of the last month of dysfunction, the shutdown will have been worthwhile. ___

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