We came across this interesting July op-ed in The Hill ("A Lobbying Lesson for Tax Cuts, from 1978") by Michael Bloomfield, President of the American Council for Capital Formation, in which he offers his recollection of the 1978 federal tax legislation, and a hopeful (wishful, perhaps) assessment of the current tax debate:
Thirty years ago, the seemingly impossible occurred when President Carter’s populist proposal to tax capital gains as ordinary income, nearly doubling the rate in some cases, morphed into a dramatic tax cut from 49 to 28 percent, helping to usher in a progrowth era.
He then asks the obvious question, to which he provides a concrete answer:
Today, when populism seems to be overwhelming pro-growth policies, is it wishful thinking to try to repeat the story of 1978, which turned the focus of tax policy to competitive job creation, strong economic growth and better living standards? Only if a business community that is normally balkanized because of parochial interests and competitive advantage speaks in unison for a strategy that benefits the overall American economy. Can the business community once again step up to the plate?
Bloomfield’s prescription lines up well with our own, made back in August ("Turning The Tax Debate, Part II"). Here’s an excerpt of what we wrote then:
It may not be outside the realm of possibility that, for example, Representative Rangel and Senator Levin will grasp this as an opportunity for tax simplification, but they would probably bear plenty of political risk–perceived risk, anyways–by saying so forthrightly. Better for the people providing testimony to Congress to take the lead on this. Rather than point out how this kind of measure will harm a particular corporate form in a particular industry, they should instead point out the wide range of private and public benefits that would flow from a more equitable and globally competitive U.S. tax code applied to all domestic enterprises! In other words, admit that you’ve got it good, and then explain why that should be the rule, and not the exception.