Election, shmelection. When it comes to keeping the enterprise known as the United States of America solvent, aka avoiding the Fiscal Cliff, the country is right back where it was Nov. 6, 2012. With pretty much the same cast of characters in this practiced faceoff: the president vs. Congress, specifically the Republican-dominated House.
This recurring crisis has grown familiar, like a melodrama with daily matinees and immediate seating. The president says the government needs more revenue to balance its books, while the loyal opposition says the country doesn't need even higher tax rates. Especially on capital that could otherwise get this stalled economy moving. Welcome to Impasse City.
Both sides are right. So why not find a way to compromise, a way to assure more tax revenue but not raise tax rates all across the board?
Here's how to do it: The voluminous U.S. tax code, perhaps the most indecipherable document since the Book of Revelation, is stuffed with special exemptions, deductions and tax breaks for just about every special interest with friends in Washington. Why not cut out some of those tax breaks? The federal fisc would be a lot healthier for it, and the American tax structure a lot fairer.
Ah, but which exemptions and deductions should be eliminated? And which should be saved? Everybody seems to have his own list of both favorites and expendables. So does every vested economic interest with its own lobby, trade association or foundation.
That's the problem Mitt Romney (remember him?) ran into when he proposed cutting back tax breaks while lowering tax rates during the late unpleasantness known as an American presidential election. Challenged to name just which tax breaks he'd cut out, he came up with an approach that was both politic and fair:
Put a cap on the amount of exemptions and deductions any taxpayer can claim, and let the taxpayer himself choose which ones he'd give up.
But would limiting tax breaks really provide enough additional revenue to reduce the federal government's increasingly unmanageable deficits? It all depends on how much of a tax break you'd allow each taxpayer to keep.