海角大神

Much as I hate to write these words, tax reform isn鈥檛 going to happen in the coming year, or even in the year after that.

The bipartisan reached by President Obama and Congress earlier this month, along with a few kind words about closing tax loopholes from a handful of GOP lawmakers, has some reformers uncharacteristically optimistic about a quick agreement to revise the revenue code. But, sadly, they are wrong. Here鈥檚 why there won鈥檛 be a serious effort to rewrite the tax code until after the next elections.

Obama isn鈥檛 on board. The President could have used the tax reform plans offered by his own or the as an opportunity to jumpstart the debate. But he was decidedly cool, calling only for a national conversation on taxes. As Ronald Reagan showed with the 1986 Tax Reform Act, a major rewrite of the revenue code requires a full-court press by the White House. To get a bill moving, Obama would have to send a complete reform plan to Congress and keep up the pressure for passage. There is no sign he鈥檚 ready to do that.

Hill Republicans are not on board. Incoming Ways & Means Committee Chairman Dave Camp (R-MI) says tax reform will be one of his priorities, and that鈥檚 a good thing. But speaker-to-be John Boehner (R-OH) has little interest in supporting real reform. In the Senate, Democrat Ron Wyden (D-OR) still has his , but his GOP cosponsor, Judd Gregg, has retired and Republicans are not exactly lining up to take his place. Republicans would surely back further rate reductions, but they have no interest in cutting tax subsidies鈥攖he hard part of reform. It is easy enough for a pol to embrace the concept of repealing loopholes. It isn鈥檛 so easy to actually cut the mortgage interest deduction. And does anyone seriously think the GOP would give Obama an historic victory on tax reform on the eve of a presidential election campaign?

Hill Democrats are not on board either. After their battering in this year鈥檚 elections, Democrats want only one thing between now and November, 2012鈥攁 plummeting unemployment rate. And they don鈥檛 see how a nasty protracted debate over tax reform will create many jobs. Besides, these days Dems are just as enamored of targeted tax subsidies as Republicans.

There is no agreement on how much money the new tax code should raise. The 鈥�86 Act passed, in part, because it produced the same amount of money as the tax code it replaced. But in the face of a $1 trillion-plus deficit and growing fiscal pressures down the road, the next reform would have to raise more revenues. Democrats, of course, will be fine with that. But the idea was red meat for Republicans even before the 2010 elections. The growing clout of the anti-tax activists who make up much of the tea party movement will make it even tougher for GOP lawmakers to budge on new revenues.

This year鈥檚 deal was tax deform, not reform. The compromise cut by Obama and Hill Republicans produced mostly winners (the only losers were workers making less than $20,000鈥攁nd they rarely vote). It extended dozens of targeted tax subsidies and kept rates relatively low. By contrast, cutting rates while eliminating deductions and credits, and raising overall taxes would create boatloads of losers. This year, Congress nearly ran out the clock arguing over how to give away $850 billion. To be sure, they agreed in the end. But that鈥檚 no clue about how they鈥檇 react to a broad rewrite of the code.

Follow the money. We have learned a lot in recent weeks about who funded those non-profit outfits that plowed tens of millions of anonymous money into this year鈥檚 congressional campaigns. And much of the cash that found its way into the coffers of successful GOP candidates came from two sources: Wall Street and energy producers鈥攁mong the biggest beneficiaries of special interest tax breaks. These folks paid good money to protect their subsidies. And I suspect they鈥檒l get what they paid for.

Make no mistake, tax reform is going to happen, and relatively soon. But not in Obama's first term. I dearly hope I鈥檓 wrong, but I just don鈥檛 see it.

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