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September 23, 2005
Figure out if it's working
Today, the Government Accountability Office (GAO) released a report today about taxes. The full report is available here for download, if you're interested.
I was. In fact, I found it validating.
It seems that our CEO President has been applying his Performance Assessment Ratings Tools with respect to all kinds of government expenditures, and has been finding lots of reasons to put a lot of large holes in several social safety nets. But when it comes to his pet project -- tax cuts, particularly for the well-off -- the Administration hasn't been applying the same standards.
No surprises there, huh?
This particular report concerns itself with tax expenditures, i.e., exemptions, credits and deductions, which result in foregone revenues. They're a problem because the number of tax expenditures has tripled over the last 30 years, and that often causes the government to have insufficient funds with which to run itself.
The report further observes that these tax expenditures should be re-examined periodically to make sure that they are accomplishing what they were designed to accomplish and that the benefit of the expenditure outweighs the cost.
It would be interesting to figure out how many of the tax incentives that Congress has writen into the tax laws to "encourage" businesses (especially for big business) to do this, that or the other thing have actually accomplished anything except to reduce the nation's collective corporate tax bill.
And the propensity of the Bush Administration to point to economic data on GDP growth and stock prices and say, "See? Those tax cuts worked," is annoying when they don't even try to establish a real, objective, causal relationship between the tax cuts and the economic growth.
Anyway, the report goes on to state, rather pointedly, "The nation’s current and projected fiscal imbalance serves to reinforce the importance of engaging in such a review and reassessment."
Therefore, the GAO recommends that the OMB and the Treasury Department undertake these periodic reviews and to subject those tax expenditures to the same performance reviews that are used to evaluate other government expenditures (those federal programs that are funded through discretionary spending).
This is not rocket science. If you're going to forego a certain amount of your revenues, check to make sure that the benefits of those losses outweigh the costs. Duh.
The OMB disagrees. You see, if they did that, then they wouldn't be able to indulge in all those lovely accounting gimmicks that they've been using to sell the public a bill of good about how much damage they're doing to the nation's account balances.
Of course, they don't come right out and say that but you know how the Bush Administration hates transparency.
Posted by The Journal Blogger at September 23, 2005 02:51 PM
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