Thursday, March 14, 2013

Protracted Problems, Political Points

Unintended consequences for some are opportunities for others

A tweet last week from our Congressional representative looked good at first: "In Herndon highlighting free tax assistance available to low to moderate income families." Then I had two thoughts: why is a complicated tax code imposed on us and shouldn't the first step from any legislator be to uncomplicate it?

Part of it is the politics of patronage. In the words of columnist Robert Samuelson, "No one wants to take away; it’s more fun to give." Part of it is jealousy of past victories and not willing to admit you were wrong. As a long-time IRS employee put it to me, "Every line in the tax code has a Congressman's name attached to it." And part of it is risk avoidance: change is risky, sticking your neck out is risky, and risky loses elections. Safe, staid, status quo: that gets you reelected.

Look – I'm no fan of activist legislators but I loathe obstructionists. Sure, tax preparation assistance for low income households is noble. But making the entire system saner and simpler for everyone yields benefits for all taxpayers and costs less for both individuals and government administration. (In a same vein, C. David Myers of Johnson Controls said, "The cleanest and lowest cost way to meet our energy needs is to consume less.")

Under the Affordable Care Act, each state is to set up its own government-regulated health insurance exchange where individuals can go to buy insurance. 50 different exchanges. Why not one national exchange? Why not beat down barriers to a nationwide free market for health insurance? Because that requires dismantling anti-competitive devices and laws that legislators themselves put in place.

Every law has side effects and unintended consequences; sometimes laws deliberately shift responsibilities to individuals (filing tax returns), other levels of government (state funding for Medicaid), or other generations (today's wage earners fund current Social Security payments). Instead of fixing the problem, legislators often find a work around or put off hard decisions. Part of that is our fault: we don't want bad news. Part of that is the fault of our elected officials: bad news gets them fired.

So until we can fix the problems, how 'bout we admit the problems? Until we get the tax code fixed, we'll provide tax prep assistance and free online filing for all. Until we can remove barriers to nationwide free markets, let's identify those barriers and quantify their costs. Until we can fund the programs we want, let's not shirk or pass on responsibility for decisions we make now.

Courage comes in many forms. Admitting and owning up to our own faults are two steps in the right direction.