Fix tax code now
Eliminating tax breaks for big oil companies, as some in Congress and the White House are advocating, isn't a bad idea. But a far better idea is to strip all such politically motivated favors from the federal tax code, while restructuring the nation's laws to enhance American competitiveness.
Summoning oil executives to Capitol Hill for a public verbal whipping whenever gasoline prices spike upward has turned into an empty cliché, like the transparent "show trials" once staged in Stalinist Russia. Just as surely, most politicians and the public will forget this issue once gas prices fall again -- they are already starting in that direction. The entire matter is as much an indictment of America's short attention span as of corporate profiteering.
With the nation hitting our $14.3 trillion debt limit this spring, it is obviously time to bring revenues and expenditures into closer alignment. Policymakers regard shaving $4 trillion from that total as an essential start toward national solvency. Taking away big oil's $20 billion in tax breaks -- now set for the next 10 years -- would get us one-200th of the way to the $4 trillion target.
That's worth doing. But it's obviously a very long way from seriously addressing our revenue needs.
Rather than demonizing one industry, even one whose arrogance invites retribution, we must distill our 70,000-page tax code into something far simpler. It needs to be logical, transparent and fair. It must achieve the nation's needs in terms of producing revenue, while keeping overall U.S. corporate taxes low enough to compete with other nations for investments, profits and job creation.
Looking out for hometown industries and campaign contributors, Congress litters our laws with garbage -- a stinking landfill that is now overflowing with expensive favoritism. Once embedded in federal statutes, these giveaways are difficult to remove. Outside the tax code, for example, a law written in 1872 and scarcely changed since then allows mining companies to remove gold and other valuables from public lands without paying any royalties to the United States.
The U.S. is long overdue for a thorough rationalization of our revenue system. It simply is not realistic to suggest that we can achieve a balanced budget with spending cuts alone. Instead, we need an old-fashioned "spring cleaning."
It is time to drag our tax code out into the open. It may be so dirty by now that our best recourse will be to set fire to it. And then we should start from scratch and design a revenue system for corporations and individuals that will achieve our objectives in the century ahead.