“Senator Clinton has a different approach,” said the slender Chicagoan to the Stepford Wife.
“She believes that we have to force people who don’t have health insurance to buy it, otherwise there will be a lot of people who don’t get it,” he continued as he methodically slashed her ideas.
“…And they may charge people who already don’t have healthcare fines or have to take it out of their paycheck, and that I don’t think is helping those without health insurance.”
That was Barack Obama, then a senator from Illinois and a candidate for U.S. president, in the Democratic primary of 2008 against New York Senator and former First Lady Hillary Clinton.
He defeated her in the Democratic primary, won the presidential election and stole her idea, making it a part of what will be his most heralded achievement as president of the United States – The Affordable Health Care for America Act, better known as Obamacare.
Let’s hope he does the same to Republican presidential candidate Mitt Romney.
I don’t mean Romney’s idea to cut income taxes by 20 percent or his idea to increase military expenditures, as President Obama correctly pointed out, the U.S. spends more on our defense and military than the next top ten nations combined. Instead, Obama should steal Romney’s idea to limit the amount of deductions that Americans can claim on their tax forms.
“One way of doing that would be, say, everybody gets — I’ll pick a number — $25,000 of deductions and credits, and you can decide which ones to use,” Romney said in the second presidential debate. “Your home mortgage interest deduction, charity, child tax credit and so forth, you can use those as part of filling that bucket, if you will, of deductions.”
Romney’s lack of specificity to the tax credits and deductions he would limit or eliminate aside, the need to reduce the amount of loopholes in the U.S. tax code is a necessity of tax reform. It is a necessity because the amount of tax credits, deductions and loopholes available to individuals and businesses amounts to expenditures by the federal government and add to the deficit and overall debt.
To be clear, these tax credits, deductions and loopholes are classified as tax expenditures. They are considered expenditures because the special provisions represent a loss in tax revenues that would not have occurred had these provisions not been written into the tax code.
For example, the Congressional Budget Office estimates that the American Recovery and Reinvestment Act of 2009, or simply Obama’s economic stimulus, will cost $840 billion.
Most of the expenses are actual expenses, like more funds for infrastructure and aid to the states. However, approximately $297 billion of that are tax benefits, or tax expenditures.
How much do these tax expenditures cost?
“New Treasury estimates, released as part of Obama’s recent budget, indicate that these tax preferences will reduce individual and corporate income tax revenues by almost $1.1 trillion in 2012,” reported the Tax Policy Center, a nonpartisan research center.
The estimate, $1.1 trillion, represents two distinct problems. First, that Romney’s idea to pay for his cuts to the income tax with cuts to tax expenditures is mathematically impossible.
Second, that these tax expenditures are wasteful, and that it isn’t only greedy corporations who take advantage of the federal government’s generosity.
On Jan. 20, 2013, if Obama is laying out the details for his second term and a grand bargain on the deficit and the debt, he should steal Romney’s idea. Even if he looks like a hypocrite.
