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Here is a sort of data dump (sorry) of various reactions I’ve had to the President’s FY2013 budget proposals in the past week.

My organization, the Concord Coalition, put out this statement on Monday, accompanied by the video summary above that my colleague Josh Gordon and I made.

(I also did this radio interview on Patt Morrison’s show on southern CA’s NPR station, KPCC, on Monday.)

I was most intrigued by what is new in the President’s proposals in terms of tax policy:  there’s actually a bolder move to combine the “Buffett Rule”–raising taxes on the rich so that their effective (average) tax burdens aren’t any lower than those of middle-class households–with a more fundamental tax reform strategy (which economists like) of broadening the tax base.  I’ve said before that there are lots of different ways to raise taxes on millionaires, but I’d prefer to see it done by reducing tax expenditures (which disproportionately benefit higher-income households and are also economically inefficient) rather than by (just) raising marginal tax rates on the currently rather narrow definition of taxable income.

Two tax proposals new to the President’s budget this year that score well in this regard are: (i) the expansion of the limit of itemized deductions policy to a broader set of tax preferences–including the exclusion of employer-provided health benefits (wow!); and (ii) letting the expiration of the Bush tax cuts for high-income households extend to the full expiration of preferential dividend tax rates, such that they would return to being taxed at full, ordinary income rates.

I wrote on Concord’s blog about the itemized deduction proposal here.

I write about this “Buffett Rule route to fundamental tax reform” among my other reactions to the tax policies in the President’s budget in my next Tax Notes column, which comes out next Monday.  I’ll give a Cliff’s Notes version of that column here then.

My column in this week’s Tax Notes (subscription-only access here) focuses on just a few of the different ways we could get more tax revenue from millionaires, summarized in the table above.  (The sources for all these numbers are various distributional estimates from the Tax Policy Center, referenced in the Tax Notes publication.)  The progressive nature of the federal income tax system, where tax burdens as a share of income in general rise with income through marginal tax rates that rise with income, and the implied upside-down subsidies created by poking holes in the tax base with exemptions and deductions (a.k.a. “tax expenditures”), makes it easy to raise tax burdens on the rich.  We can either make the rate structure steeper, or we can broaden the tax base for any given (already-progressive) rate structure.

Some ways are better than others from an economic efficiency standpoint, in that they level out the very uneven playing field, reducing the tax distortions between fully taxed and more lightly taxed (or untaxed) activities.  These would include proposals 3 and 4 –treating capital gains and dividends like ordinary income, and limiting itemized deductions to 28 percent.  Others might be viewed as preferable from a fairness perspective if the goal is to reduce income inequality and increase the share of the tax burden borne by millionaires–a statistic I dubbed “millionarity” in the table.  These include proposals 2 (letting just the high-end Bush tax cuts expire) and 5 (the millionaire surtax).  Still, my favorite tax policy option to point out is the one already in current law (#1 on the list above): letting all the Bush tax cuts expire, which scores low on “millionarity” but high in terms of total revenue raised and even the total dollar amount of higher taxes on millionaires.  You want to collect more in taxes from millionaires?  Just collect more taxes in general by not passing any more tax policy changes (allowing the Bush tax cuts to expire as scheduled, this second time around, at the end of this year), and you’re assured that you’ll get a disproportionate amount coming from those same millionaires who now disproportionately benefit from those tax cuts we keep extending (and deficit financing).

Another way to raise taxes on millionaires is to use yet another Alternative Minimum Tax (AMT), focused on millionaires only–like the proposal recently introduced by Senator Sheldon Whitehouse (D-RI).  I spoke with Forbes’ Janet Novack about why that’s more clever from a political perspective than an economic one.  Also in Janet’s column, my friend Len Burman astutely points out the huge incentive to divorce that would be created–if you’re lucky enough to be an unhappy but rich couple, at least. 

The Congressional Budget Office’s new budget and economic outlook is out, and as usual, it really doesn’t seem all that bad when you look at their “baseline” numbers.  (Deficits as a share of GDP over the next ten years are still at economically sustainable–less than the growth rate of the economy–levels.)  Oh, except that the CBO baseline is (by law) a projection of current-law policies, which assume a lot of very optimistic (some might say “delusional”) things about Congress’s proclivity toward fiscally responsible behavior.

You see, in current law there are lots of costly policies that expire after a year or two…or nine, or two–as in the 2001 Bush tax cuts which were first scheduled to expire at the end of 2010 and now again are scheduled to expire at the end of 2012.  Expiring tax cuts have been the most fashionable way to deficit spend in this town ever since.

In their budget outlook, CBO assumes any tax cuts scheduled to expire actually expire.  That could mean CBO’s assuming they will actually expire, or it could mean (more realistically but still very optimistically) that if Congress and the president extend the tax cuts in the future, that they will fully offset their cost, by cutting spending or raising other taxes–a novel concept known as “pay as you go.”  Once upon a time, Congress followed strict pay as you go rules–on both tax cuts and mandatory spending–and they complied with discretionary spending caps, too.  By the way, that was the last time we were actually running budget surpluses, at the end of the Clinton Administration.

Now Congress prefers to make policies look less costly by making them “temporary,” with official expiration dates that CBO has to officially score as being less costly because they (are supposed to) expire.  But a more realistic “business as usual” projection would assume that these previously-always-extended-and-deficit-financed tax cuts will continue to be extended and deficit financed.

Enter the Concord Coalition’s “plausible baseline” (illustrated above), which we’ve been calculating for many years now, and which has told (really) the same old story for many years now, just the numbers keep getting worse because the fraction of the tax cuts that are on unofficial time (past expiration dates) vs. official time keeps growing.  Every year it seems that the multiple of the deficits under Concord’s plausible baseline relative to those under the CBO official baseline keeps swelling.  Last year I remember saying that the plausible baseline’s deficits were triple the CBO deficits.  This year it’s closer to quadruple.

Most of the $8.7 trillion ten-year difference, $6.5 trillion, is due to tax policy.  The (expiring) Bush tax cuts and associated Alternative Minimum Tax relief alone account for over $4.5 trillion of the difference, even without associated interest costs.  (With interest, the deficit-financed extension of the Bush tax cuts and AMT relief would add almost $5.4 trillion to the ten-year deficit numbers.)

Some of you might remember what the so-called “super committee” was trying to do: they were trying to “go big” and find, hmmm, maybe $4 trillion worth of deficit reduction relative to the “business as usual” or “policy-extended” baseline.  The “go big” solution is that which most economists feel is necessary to get deficits back down to economically-sustainable levels… like those very ones that are shown in this new CBO report.  So that would have been a piece of cake for the super committee–or anyone else in Congress who might want to be a fiscal superhero–if they just looked at the CBO baseline and figured out how to stick to it.  (Hint: PAYGO.)

So there’s not much new here.  The CBO report still provides us with a fiscal roadmap with one very clear route highlighted as the fastest one to the land of sustainability.  All the road signs point clearly to that one route, but all the policymakers keep missing that turnoff ramp, over and over again.  And none of them really want to talk about it.

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***Addendum:  Here’s the Concord Coalition’s press release on the CBO report.

It’s a proposal that has come up over and over again in President Obama’s budget, and one that I hope will come up yet again.  In my column in today’s Tax Notes (subscription-only access here), I remind readers that this is a great idea whose time has (been overdue to) come: the proposal to limit itemized deductions–to either 28 percent (the President’s version) or 15 percent (the more aggressive version suggested by CBO’s budget options volume). I like it because it’s a proposal to raise a lot of revenue (and reduce the deficit), yet by reducing a large tax expenditure in a progressive way.

How much revenue would the proposal likely raise?  A lot.  I refer to CBO estimates:

The CBO estimates the president’s proposal would raise $293 billion over 10 years. A more ambitious version limiting itemized deductions to a 15 percent rate, as presented in the CBO’s compendium of budget options, would raise $1.2 trillion over 10 years — in other words, equivalent to trimming overall tax expenditures [which are over $1 trillion per year] by about 10 percent through that one policy change alone.

A lot of people get confused about this proposal, thinking that it eliminates the tax subsidy for households above the limiting bracket, but it does far from that.  It only limits the size of the subsidy so that the richest households don’t get the biggest subsidies per level of the subsidized activities (in both percentage terms and dollar terms), which makes the proposal a very “progressive” way to reduce a (huge) tax expenditure.  Right now the subsidy is a regressive one, because for any given level of subsidized activity, higher-bracket households get the biggest subsidies.  I constructed the table above to make clearer how that upside-down subsidy works, and how the limit would level at least part of it–the upper end–out.  These proposals would not get rid of the regressivity below the limiting bracket, however, which could only be achieved if we went all the way to converting the deduction to a (refundable) credit.  Ideally, I would like to see all deductions converted to credits, but limiting deductions to 28 or 15 percent is a good step along that policy path.

And to counter arguments that this would kill the economic activities currently subsidized by the (full) itemized deduction, well, the evidence is actually very inconclusive about how much this tax subsidy actually makes a difference in the level of the subsidized activities (charitable giving, borrowing for homeownership), because it is always difficult to distinguish between real behavioral responses versus tax-strategic ones.  Often these tax subsidies just reward behavior rather than influence it, or they encourage something that is not quite the lofty social goal that policymakers had in mind.  As I point out in my column:

Assuming that the goal is in fact to encourage and steer resources to the activities that are subsidized, the case for the effectiveness of this particular form of subsidy depends on how much more responsive higher-income households are to the [price incentive] effect than are lower-income households. This is an empirical question that’s difficult to answer from the data because high-income households with the biggest price subsidies are also those with the greatest income capacity (who might donate the most to charity or buy the largest houses regardless of the itemized deduction). And while the evidence that’s out there shows some price responsiveness, it’s not always clear that it’s the type of responsiveness we would want. A larger charitable deduction might encourage more reported giving without increasing real giving, and a larger mortgage interest deduction might encourage people to buy larger houses rather than helping them to buy any house. And all of the deductions may merely reward behavior that would have taken place anyway.

So I put out my column as my strong endorsement of this proposal. The bottom line is that this is a way to raise substantial revenue from only higher-income households and would actually improve economic efficiency (reduce the distortions caused by the tax subsidies).  It’s a base-broadening, revenue-raising, deficit-reducing, yet government-shrinking proposal.  It’s consistent with the fiscal policy goals of both Democrats and Republicans.  It would also be a piece of cake to implement, unlike other base-broadening proposals that have similar economic advantages.  Why don’t we just do it, finally?!!

The Washington Post’s Ruth Marcus points out that if Mitt Romney really cares about the poor, he has a funny way of showing it–in this case, regarding his ideas for fiscal policy reforms:

“I’m concerned about the poor in this country,” Mitt Romney said the other day. “We have to make sure the safety net is strong and able to help those who can’t help themselves.”

I perked up at those words, because they were something of a departure from his usual stump speech and because they happened to come on a day when I had written about the dire implications of Romney’s proposals for the social safety net.

I don’t question his sincerity. The problem: This fine sentiment doesn’t square with his actual policies…

The impact of Romney’s approach on the safety net would go far beyond Medicaid. The brutal arithmetic of his stated plan to cap spending at 20 percent of gross domestic product — while, unlike Ryan, increasing defense funding — is that safety-net programs would have to be chopped significantly beyond where even Ryan would take them.

Romney’s tax plan would exacerbate the unfairness. He would continue the Bush tax cuts for the wealthiest Americans and provide extra breaks that would primarily help the rich…

At the same time, Romney would do away with recent increases in the child tax credit and the earned-income tax credit — provisions that help low-income families…

This is one way to make the necessary tough choices regarding the federal budget:  if we choose to keep taxes low and defense spending high, the rest of the budget has to give.  There’s a lot to be said for a politician being clear about his priorities and spelling out the policies consistent with those priorities.  But as Ruth points out, the consequences must be spelled out, too:  you can’t cut spending on the poor that dramatically and expect that the poor will be better off.  To do so is either the result of delusional beliefs about extreme “trickle down” economics, or a grossly exaggerated view of how much truly “wasteful” government spending now exists–unless one’s definition of “waste” is simply “that which does not benefit me personally.”

Well, this is going to raise some voters’ eyebrows:

“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything,” Romney, a GOP presidential candidate, said. “My last 10 years, I’ve — my income comes overwhelmingly from some investments made in the past, whether ordinary income or earned annually. I got a little bit of income from my book, but I gave that all away. And then I get speaker’s fees from time to time, but not very much.”

(The “not very much” in speaker’s fees is apparently more than $360,000, by the way.)

Besides being good negative gossip on Romney, though, perhaps it will be a teaching moment for all of us about tax policy more generally.  It underscores the fact that even the preferential rate on capital gains and dividend income, even though it seems more an issue about tax rates than tax base, is a big tax expenditure–a big way we “spend” money via the tax code.  Relative to a comprehensive income tax base where all forms of income are taxed at the same rate, the lower rates on capital gains and dividends result in well over $100 billion a year in lost revenue.  (See Table 17-3 in the revenue section of the analytical perspectives of last year’s budget and note that just the first three capital gains provisions add up to $135 billion for just fiscal year 2012.)  So besides the distributional implications that are already unsavory, there are the budgetary implications that should make us question whether these tax preferences are worth their cost.

So let the gossip and thoughtful conversations begin!

Bruce Bartlett has a new book coming out in a couple weeks; you can pre-order it on Amazon here.  It looks like another great piece of work from Bruce.  Here’s a excerpt from the first review of it, by Vanessa Houlder of the Financial Times:

In Mr Bartlett’s view, higher tax revenues are needed to stabilise the US’s finances; one of the goals of tax reform should be to make the higher tax burden more bearable. But it will not happen unless there is a much better public understanding of how the tax system works. The author sets out to guide the uninitiated through the fundamentals of taxation at the simplest level. This deceptively dry approach is the basis of a powerful critique of the myths, misconceptions and inequities of the tax code.

The public misunderstands basic facts about the tax system. Polls show that most people overestimate federal tax rates. Few know that close to half of all tax filers either pay no federal taxes or get a refund. Even for the wealthiest people, the top rate of 35 per cent – half what it was as recently as 1980 – is not nearly as high as people imagine. The reason the US has one of the most progressive income tax systems in the world is that the income threshold at which the top rate takes effect is much higher than other countries.

Rates are only part of the story. Many taxpayers in the top 1 per cent of the income distribution pay less of their income in federal income taxes than those barely in the middle class. One reason is that wealthy people often own their businesses, so can pay themselves in the form of lightly-taxed dividends. Another reason – the main target of Mr Bartlett’s ire – is the plethora of credits, deductions and tax breaks that distort behaviour and subsidise special interest groups. The curtailment of these tax “expenditures” would be enough to raise the revenues the US needs.

This is not a novel suggestion. As a veteran tax reformer, Mr Bartlett has spent years fruitlessly arguing for the abolition of cherished reliefs, such as mortgage interest deduction, which costs nearly $100bn a year. He views such tax breaks as “loopholes” and laments the absence of popular outrage about the scope they provide for gaming the system.

The reason, he speculates, is the declining emphasis on a balanced budget and the oft-repeated mantra that “deficits don’t matter”: the public no longer believes that if some taxpayers do not pay their share, others will have to pay more.

Conservative opposition to higher taxes is overwhelming and probably insurmountable. But attitudes can change. The trigger could be inflation, high interest rates and economic instability ushered in by a worsening debt crisis. Mr Bartlett points out that when inflation became a problem in the 1960s, people saw budget deficits as the primary cause. This made them more sympathetic to tax increases, such as the 1968 surtax.

I guess in the end, Bruce must sound at least somewhat optimistic or hopeful for the change in fiscal course that’s needed, for the FT review concludes with:

The challenges the book describes are not insurmountable. But reform will require compromises from all sides that are currently unthinkable as the US heads into an election year. Politicians seem unable to grapple with radical change. But once their backs are against the wall, coping with a future debt crisis, perhaps they will.

In my column in this week’s Tax Notes–in which Grover Norquist has been named 2011 “tax person of the year,” by the way (more on that later)–I list a few new year’s resolutions for tax policy (emphasis and brief descriptions added):

[Here are] some New Year’s resolutions for those who make, study, and care about U.S. tax policy: (1) don’t view tax policy in a vacuum [recognize the interaction of tax policy with the rest of the federal budget and government's role in general]; (2) plan ahead for expiring provisions [look ahead to what's coming due in the next year, and start the policy debates and analysis now rather than in the 11th hour]; (3) accurately analyze short-term versus longer-term economic effects [how are the considered policies helpful or harmful to the economic goals of highest priority?]; (4) set revenue targets and stick to them [use the budget process and budget committees to bring tax policy into the deficit reduction effort]; (5) treat tax expenditures more like expenditures [recognize they're more like spending-side subsidies than simple tax cuts, and scrutinize them to evaluate whether their benefits are worth their costs]; (6) don’t be hypocritical about fiscal responsibility [don't fuss over the small-change items while giving a huge pass to the big-ticket ones]; (7) don’t be so afraid to agree with the other side [there's huge bipartisan common ground on goals for tax and fiscal reform if policymakers would only stop picking fights]; and (8) get specific about good tax policy [study, analyze, and better promote the specific tax policies that experts recognize as economically smart so that policymakers are forced to notice and respond].

Note that this list is more broadly applicable to fiscal policy–tax and spending–more generally, but I was writing for Tax Notes, of course.

The biggest item on this year’s expiring tax provisions list is of course (and yet again) the Bush tax cuts–or as I sometimes refer to them, the Bush/Obama tax cuts.  Who knows, if policymakers keep doing the same old thing with them, by next year they could become the “Bush/Obama/Romney [or Santorum or Gingrich or Paul]” tax cuts!

My Tax Notes column reprinted the CBO table above, just to highlight the point that these expiring tax cuts–just the ones set to expire by the end of this year–are worth $4 to $5 trillion over the next ten years, without interest costs.  (Remember the “go big” goal?)

Happy New Year to my EconomistMom readers!  More from me later this week.

Here’s a blog post of mine just published over on Concord’s blog, The Tabulation; I’m cross-posting it here:

The current debate over extending the payroll tax cut well demonstrates that policymakers often mean different things when referring to policies that “help” or “expand” the economy. I often hear the words “stimulus” and “growth” used interchangeably, but when economists use them, we typically are making a distinction between different economic goals that apply to different circumstances.

“Stimulus” usually refers to short-term policies to increase demand for goods and services in an economy  operating at less-than-full capacity — i.e., an economy with high unemployment. In such a recessionary economy, the problem is not a lack of productive resources (capital and labor), but a lack of demand for the goods and services that those resources produce. Under such conditions, public sector deficits — whether through tax cuts or direct spending — can be an effective way to increase demand (consumption) and the level of economic activity.

“Growth” usually refers to the long-term expansion of the “supply side” of the economy — that is, the supply of capital and labor. When the economy is at “full employment,” the binding constraint on it is not the demand for goods and services, but the supply of inputs to production. Fiscal policies that are good at growing the economy over the longer term are therefore those that encourage greater educational attainment, labor force participation, and saving. Instead of the recessionary goal of increasing consumption, we want the opposite over the longer term: We want to increase saving. Reducing tax rates is often emphasized as a good “supply side” policy because raising the net-of-tax return to working or saving can improve the private sector’s incentives to supply these resources. But any deficit-financing of such policies is counterproductive in dollar-for-dollar reducing the public sector’s contribution to national saving.

In the debate over the payroll tax cut, we are hearing arguments from both sides that muddle the distinctions between short-term, demand-side stimulus and longer-term, supply-side growth. Many Republicans argue that the payroll tax cut is not an effective way to expand the economy, but they are probably measuring it against their favored supply-side yardstick. The Congressional Budget Office (CBO) shows that a payroll tax cut is one of the most effective tax cuts in stimulating demand for goods and services in a recessionary economy — not as effective as direct spending on unemployment benefits but still far more effective than high-end income tax rate reductions.

Both Democrats and Republicans seem torn about paying for the payroll tax cut, for probably different, yet both valid, reasons. Democrats don’t want to offset the cost with immediate spending cuts that could largely negate the short-term stimulative effect of the tax cut. If spending cuts are fairly immediate and significantly affect lower-income households, they would likely offset the stimulative effect of the tax cut. Republicans don’t want to offset the cost with other tax increases because they worry that supply-side incentives would worsen. These concerns are legitimate when the offsetting tax increases stretch into the longer term (after the economy gets back to full employment) and to the extent that the tax offsets adversely affect the returns to working or saving.

As the Concord Coalition has emphasized many times before, it is possible to effectively stimulate the short-term economy while being fiscally responsible about the longer term. Deficit financing should ideally be limited to short-term policies that have high “bang per buck” in increasing demand for goods and services. Longer-term policies designed to grow the supply side of the economy when it is back to full employment ought to be paid for in ways that protect the incentives  to work and to save. And any offsets to the cost of stimulus policies should be designed to have minimal damage to short-term demand — by steering the burdens toward higher-income households or stretching the offsets over the longer term.

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Postscript:  To these issues of the stimulative effect of the payroll tax cut and whether and how the costs are offset, I’ll be adding the additional confusing issue of how the payroll tax cut affects the Social Security program–short answer, “not”–in my next Tax Notes column.

chart from the Concord Coalition on supercommittee goal

So, hey!–It’s 11/11/11, and we’re down to not much more than 11 days (ok, darn–it’s technically 12) until the Nov. 23 deadline for the “super committee” to come up with proposals that would achieve $1.5 trillion in deficit reduction–or as close to that while hopefully going over as possible.  The confusion on the goal is because the conditions for the triggered automatic cuts and debt limit increases differ depending on whether $1.5 trillion, $1.2 trillion, or less than $1.2 trillion in deficit-reducing policies are actually enacted by December 23.   The graphic above is a Concord Coalition slide from one of our chart talks; it is designed to help explain the goals and triggers of the super committee, although it isn’t as readable as a photo image here as it is as a huge powerpoint chart up on a big screen–sorry.

On Halloween Day I published a column in (subscription-only) Tax Notes, called “Tricks and Treats Handed to the Supercommittee.”  We reprinted the column on Concord’s (free) website this week, and it can be found here.  I already quoted from my conclusion earlier–that the super committee could and should propose a set of budget rules and instructions that would force the standing committees to come up with tax reform that would achieve the current-law baseline level of revenues.  To encourage bipartisan agreement on raising that much (”go big”) revenue relative to the “business as usual” policy extended baseline where expiring tax cuts get continually extended and deficit financed, the super committee could even dictate that a certain specific minimum percentage (up to 100%) of the added revenue raised be achieved by reducing tax expenditures as opposed to raising marginal tax rates.

I repeated this message in smaller space last weekend in the Milwaukee Journal-Sentinel, summarizing it this way:

The supercommittee could require that the tax-writing and budget committees come up with a combination of budget rules and tax reforms that would achieve the current-law baseline level of revenues.

There are many different policy paths to this same budgetary outcome:

“Do nothing” (let the Bush tax cuts expire as scheduled at the end of 2012), “do it big” (broaden the tax base by reducing tax expenditures and lowering tax rates), and “do it to the rich” (raising tax rates on millionaires and/or large corporations).

Each approach has different relative advantages regarding their economic effects and political attractiveness. We could do any combination of the approaches and all would be encouraged in practice with a commitment to strict, no-exceptions, pay-as-you-go rules - both on new or extended tax cuts and as well as spending increases.

Coupled with the spending-cuts-only approach taken in the first round of deficit reduction that arose from the debt-limit debate, the second-round supercommittee recommendation of sticking to current-law revenue levels would get us the big and balanced approach we need to set us on the path toward true fiscal sustainability and a strong economy in the decades to come.

Yet one of the first reader-commenters on the Milwaukee JS site wrote this:

No mention of revenue. Apparently she feels all taxes should be eliminated…So a “cuts only” approach is “balanced”? Yep, she does want to eliminate taxes altogether. How could one interpret her comments differently? We already have the lowest tax rates since the 1950’s.

I kid you not!  I advocate a second-round revenue-only approach, and it gets interpreted as precisely the opposite!

Is this not proof that the whole expiring tax cuts, current-law vs. policy extended (”business as usual”) baseline issues have gotten us all–not just the general public, but policymakers and the super committee included–terribly confused?

Some Republicans have urged in their letters to the super committee that this is why expiring tax cuts should never be allowed to actually expire!  I argue the opposite: that this is exactly why expiring tax cuts must be forced to expire–or at least not be extended without paying for them.

Perhaps we can use the confusion to our advantage.  The super committee could require the budget and tax-writing committees to get to some level of revenues anywhere between the $1.5 trillion goal (which is relative to the policy extended, business-as-usual baseline) and something that would better qualify as “going big.”  Anything less than the full difference between the two revenue baselines would still be something that relative to current law is a tax cut. What Republican could argue against a super committee policy that would dictate tax reform that must literally (under the letter of the law) reduce revenues?

The super committee has not the time nor the expertise to reform the tax system in (12) days.  But they have the capability and the authority to require the tax writing committees, with the help of the budget committee police, to reform the tax system in big and helpful ways over the next few years.  This can happen with tougher budget rules that are determined now and will have to be in place and enforced at the next expiration of the Bush tax cuts–so it won’t just be (bad) “business as usual” the next time around.