Well, this is old news now, but remember when Rick Perry was saying that he wants to simplify the 3,500 page tax code because it’s too complicated?
The reality is – facts here, so we’re going to state them, then see how to make an actual useful argument – most of the tax code is about corporate taxes, and in particular about exemptions, deductions, and exceptions for the benefit of various business and types of businesses. If you wonder why Exxon doesn’t pay any income tax on profits of $60 billion, or whatever the number is, it’s because the tax code specifically gives big oil companies breaks on their taxes for innumerable special cases and exemptions. With the result that the most profitable company in the history of the world paid no income taxes in 2010. I think we can all get behind the idea that the tax code needs some work.
What Perry is trying to imply when he says he wants to simplify the tax code is that it will make it simpler and cheaper for individuals – not only will their taxes be lower, but the burden of doing their taxes will be smaller. This of course is a canard – for most ordinary Americans the tax code is pretty simple, especially if they don’t own a house or own their own business. If they own a house or a business, then it gets a bit more complicated, but it’s not that bad. So, the argument against this ridiculous claim has two prongs:
- Compare the amount of tax code that applies to individuals to the amount that applies to corporations. “Mr Perry, are you going to simplify the 100 pages of tax code that apply to Exxon and that enables the most profitable corporation in the history of the world to pay no taxes in 2010? I think that would be fantastic!”
- Or, “Mr Perry, I applaud your effort to get to the bottom of how Exxon, the most profitable company in the history of the world, managed to pay no income taxes in 2010.”
- Or, “Mr. Perry, I think your idea of a flat tax is excellent! I agree we need to address the situation we had in 2010 where Exxon, the most profitable company in the history of the world, paid no income taxes.”
I seem to be stuck on the Exxon example, but it’s pretty hard to beat the “most profitable company in the history of the world” trope!
Then, for the second prong: The reality is that corporate America bought and paid for that complicated tax code, and they are not going to let some upstart just go and simplify their deductions away. So that’s totally not going to happen. So if you’re a progressive or liberal pundit you really have to hammer on the fact that the winners in the complicated tax code game are the corporations themselves. You should have specific examples for different situations, but the Exxon example is perfect as the catchall example – there’s clearly quid pro quo going on for the oil companies, there’s a good link to Bush, and it’s just unfathomable that the most profitable company in the history of the world would end up paying no income taxes. So you just have to imply that all this other malfeasance is going on, and it’s right there in the tax code, in 3,450 pages out of the 3,500 pages. I’m not sure whether it’s better to say “99% of the tax code is loopholes for corporations” or “only 1% is about what individuals have to pay, the rest is corporate loopholes.”
There are some people who can get away with talking about these “loopholes” – I’m not sure Obama can himself. But anyone who comes on to, say, Christiane Amanpour’s show as a “liberal” should have all these tropes to hand. And you just hammer on these tropes, just like the Republican shills hammer on their tropes.
Let’s make a list of all the true things you can say when a right-winger claims tax cuts are good for the country, for the economy, or for jobs:
- You bet we need some tax reform – Exxon, the most profitable company in the history of the world, paid no income taxes in 2010.
- Tax cuts always result in lower growth or recession or other economic problems. Reagan’s cuts resulted in the biggest peacetime deficit in history (until Bush) and we’re still paying for it
- America has its highest growth during periods when taxes are relatively high
- Republican intransigence, personally targeted against Obama, has resulted in a double-dip recession, no jobs, and no relief for the rules-following homeowners whose homes are under water due to Bush’s 2008 crash.
- The problems we have still are do to Bush’s 2008 crash.
- The 2008 crash was caused by Republican-driven deregulation of the financial markets, after 50 years of safety following FDRs Depression-era regulations.
- If we’d had these regulations in place in 2007 (transparency rules and leverage limits) the 2008 crash could not have happened
And that’s just a taste.