Angus King's Great Bush Tax Cut Idea

Moneybox
A blog about business and economics.
Sept. 19 2012 4:36 PM

Angus King's Great Bush Tax Cut Idea

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I am not normally a believer in the fetishization of non-partisanship, but in the case of Maine Senate candidate Angus King—a pretty conventional center-left politician who for some reason insists on not formally being a Democrat—it really has led to smart thinking on the Bush tax cuts gridlock that's afflicting congress. On the one hand, the Bush tax cuts are not fiscally viable in the long-term. On the other hand, given the state of the economy rescinding them as scheduled would be somewhere between pointless and deeply harmful.

Federal tax law is too complex – it takes over 73,000 pages for the Standard Federal Tax Reporter to explain the federal tax code. The tax structure must be simplified and reformed to lower rates, close loopholes, and ensure that everyone is paying their fair share – this includes the wealthiest Americans. I was in favor of ending the Bush-era tax cuts immediately, but after continued poor employment numbers, we need a more nuanced approach. We should consider pegging the sunset of these tax cuts to something non-arbitrary, like a certain amount of GDP growth, or a lower level of unemployment. This would avoid the unproductive brinkmanship that Congress engages in over this issue – and could prevent our fragile recovery from being further slowed down.
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The stuff on base-broadening reform is just boilerplate, but a trigger mechanism for the tax cuts is an excellent idea. It'll avoid undue fiscal drag, and create a situation in which the Federal Reserve can use its tools to nurse the economy back to health without needing to cope with weird fiscal shocks. This kind of nuanced position, unfortunately, is ill-suited to the kind of high stakes games of chicken that have become congress' main way of doing business. But sometimes it's nice to see a candidate display a little original thinking out there on the trail.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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