Hard work undone by election year politics

The departure of Sen. Max Baucus, D-Mont., as Senate Finance Committee chairman has set back efforts to achieve comprehensive tax reform.
His replacement, Sen. Ron Wyden, D-Ore., has declared that there won’t be any major tax changes for individuals or businesses this year.
This is a significant setback for the economic recovery. Many economists think that a simplified tax code for both individuals and businesses could greatly improve economic efficiency, and if done soon could help stimulate faster growth.

BIPARTISAN EFFORT

Mr. Baucus, confirmed this month as ambassador to China, had been working with House Ways and Means Committee Chairman Dave Camp, R-Mich., on comprehensive tax reform, and Mr. Wyden could have picked up the work that Mr. Baucus has done, but he chose not to.

Mr. Baucus and Mr. Camp have done much of the heavy lifting, and Mr. Wyden should have stepped up and pushed forward in what looks to be a light legislative year. Many in the House support comprehensive tax reform, as do many in the Senate.

To be sure, there is still a lot of hard work to be done, but it is work that shouldn’t take a back seat to politics.

TAX REFORM DELAYED

But unfortunately, to Mr. Wyden, election year politics apparently are more important than improving the efficiency of the economy and creating jobs. Pushing tax reform would require the elimination of many, if not most, tax loopholes and deductions, and that might endanger the financial support from industry for many of his Senate and House colleagues.

Most likely, Mr. Wyden will wait another year until this year’s elections are safely out of the way before beginning to work on revisions.

Meanwhile the economy must struggle along with an incomprehensible, dysfunctional tax code that distorts economic activity and burdens all taxpayers.

At least accountants and tax advisers can cheer.