Tuesday, February 7, 2012

Term Limits! For Taxes...

    Today, Ben Bernanke addressed the Senate Budget Committee and urged them not to let the Bush tax cuts expire.  Sunday, New York mayor Michael Bloomberg said on Meet the Press that the Bush tax cuts should be allowed to expire.  In mid-January, Council of Economic Advisers Chairman Alan Krueger said that not only should the Bush tax cuts be allowed to expire, the Estate Tax rate should return to [higher] 2009 levels to where it was before it was cut on January 1, 2010.   And disagreement remains over whether or not the Social Security payroll tax cut should be extended or ended in 2012.  In earlier posts, I discussed the foolishness of monkeying around with the SS taxes rates mid-year or worse, mid-quarter.
    This time, however, I would like to address a different aspect of this tax issue.  Why do we rarely read of a "tax increase" expiring?  A Google News search for the exact phrase "tax increases expire" returns precisely three results.  And all three are referring to state taxes, not federal.  Aside from the seeming inability of Congress and the Executive Branch to control spending, could not this phenomenon be a large factor in explaining why reducing the size of government never seems to happen?  Would it not produce different results if Congress was forced to vote to extend tax increases instead of just passively allowing cuts to expire?  Any effort to reform the tax system should have a built-in requirement for term limits, not on Congress members, but on tax increases.

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