Republicans hate deficits, except when they’re caused by tax cuts
June 10, 2014 12:00 AM
By GAIL COLLINS
Let’s talk about tax reform.
Come back! This is going to be really interesting. Or at least I will try to trick you into feeling that it’s interesting by making copious references to popular culture.
We should begin with Rep. Dave Camp, a Republican from Michigan who is the chairman of the powerful House Ways and Means Committee. Mr. Camp has been on a quest to make the tax system cleaner and simpler. In this matter we might think of him as a Hobbit, facing great danger in his search for the golden W-2 form.
“I aim to launch and fight the tax reform battle once again,” Mr. Camp announced, rather grandly. After many, many hearings and discussions, he unveiled a proposal to reduce the nation’s high corporate tax rate by eliminating loopholes that allow a number of corporations to avoid paying anything at all.
It was, if not supremely heroic, at least a nice principled stand. Like on “Mad Men,” when Don Draper gave Peggy the chance to do the presentation for the Burger Chef account.
Mr. Camp’s plan raised taxes on banks. It nibbled away at many sacred cows, even the mortgage deduction. The Democrats did not love his approach, but a lot of them gave the chairman credit for trying.
The Republicans, however, hated the idea of irritating so many powerful special interests just to create a simpler, tidier tax system. House Speaker John Boehner, asked about Mr. Camp’s plan at a news conference, famously responded: “Blah, blah, blah, blah.” This was a betrayal somewhat similar to the moment in “Game of Thrones” when Lord Walder Frey assassinated his new in-laws at his daughter’s wedding.
“It went down the toilet!” said an unsurprised Norm Ornstein of the American Enterprise Institute. The last time Congress actually managed to pass serious tax reform, Mr. Ornstein noted, was in 1986. Good old 1986. Tom Cruise was flying around in “Top Gun,” William Shatner was transporting whales in “Star Trek IV,” and former New York Knicks star Bill Bradley was simplifying the tax code in the Senate.
“Find me a Bill Bradley now,” Mr. Ornstein challenged.
Actually, I found Bill Bradley himself, who was happy to reminisce. His interest in tax reform, he said, stemmed from the fact that “as a basketball player I was a depreciable asset.” Truly, our tax code is a thing of wonder. Do you think Batman gets to write off Robin? I digress.
Congress 2014 was definitely not up to a 1986-style effort. Reform went nowhere. So how do you think Dave Camp responded?
He marched into a committee meeting and took up $300 billion worth of temporary tax breaks that were due to expire. Most were things he had proposed eliminating or cutting back on in his principled tax plan. Mr. Camp then asked that all of them be made permanent.
This made no sense at all. The biggest of the temporary breaks allows businesses to get half the depreciation write-off on the cost of new equipment right away. Some people believe that during recessions, this helps jump-start the economy.
Many experts doubt it really works. Either way, you obviously destroy the incentive to speed up purchases if the fire sale lasts forever.
“This is not failure of tax reform,” Mr. Camp told the committee. “This is incremental progress on tax reform.”
It was sort of a shock. Like the time on “Scandal” when Olivia Pope found out that her beloved deceased mother was actually a sinister anti-American spy being held in a secret prison.
Mr. Camp’s theory was that he was dealing a blow to Congress’ habit of continually passing temporary tax cuts. Temporary tax cuts are not paid for. It’s a magical thing, like the appearance of food in the dining room at Hogwarts.
By making the tax cuts permanent, Mr. Camp argued, he would be forcing his colleagues to come up with the money needed to fund them.
Or not. “Republicans care deeply about deficits, unless they’re caused by tax cuts. Then they don’t give a damn,” said Mr. Ornstein.
At least it made for an unusually interesting committee meeting. One of the tax breaks — which Mr. Camp wanted to kill until he wanted to extend it forever — allowed companies to take a write-off for donating unsold food to food banks. The Democrats warned that Congress was encouraging businesses to foist their “stale potato chips and Twinkies” on to the innocent poor. Republican Tom Reed of New York retorted that some of those aging snacks were going to needy “children and their birthday parties.”
On party-line votes, Ways and Means followed Mr. Camp’s lead. The House Republicans are now on their way to approving permanent tax cuts that would add about $600 billion to the deficit over 10 years.
It will make a lot of corporations happy, but, as a plan, it’s like — wow, what do you think? Walter White’s idea on “Breaking Bad” to pay his hospital bills by selling meth? Something about vampires or zombies? Feel free to fill in the blank.
Gail Collins is a syndicated columnist for The New York Times.