The tax bill working its way into completion in Congress with the unqualified support of South Dakota's congressional delegation continues to look like a venture in legislative surrealism. First off, I keep wondering if this silly notion of filing our tax returns on a postcard has ever made any sense. Who in their right minds would send personal information—especially Social Security numbers—into the mails on a post card? Not only does the nonpartisan Tax Policy Center think the idea is ludicrous, the center notes that the equivalent of a one-page postcard already exists. It's called Form 1040EZ. TPC thinks the number of taxpayers who will be able to simplify their returns into a single-page format created by the tax bill will grow to 29 million, a 12% slice of the 240 million returns that are filed each year. How many of those are likely to use a tax-preparation service, simplification notwithstanding, is impossible to determine. The IRS estimates that 90% of Americans use tax-prep services, many of them short-formers. I doubt that number will change much under the new code, simplification or no simplification. Meantime, 210 million filers will still have to do it the hard way. Thanks for not much, tax reformers.
A more unnerving embrace of surrealism is the casual manner in which deficit hawks have waved off the specter of increasing federal debt built into this bill. South Dakota Senators John Thune and Mike Rounds have both called existing deficits "unsustainable," but enthusiastically embrace this bill just the same. Congress' Joint Committee On Taxation says that the $1.4 trillion in revenues lost by the tax cuts will only be partially offset by $458 billion in revenues gained by its boost to the economy. That leaves a $1 trillion dollar hole in the federal balance sheet in 10 years. Thune, Rounds and their equally indifferent counterpart in the House of Representatives, S.D. Congresswoman Kristi Noem, have built their careers on complaints about federal deficits, yet here they are, cheering on the addition of another trillion bucks to our federal ocean of red ink. Their collective admiration for the notion that tax cuts will stimulate enough economic growth to pay for the deficit has been pooh-poohed by history so many times that you wonder if our elected reps go catatonic when confronted by this type of analysis. Moody's Analytics says the economic stimulus argument is baloney, as does the track record of tax-cutting itself. Reagan, George W. Bush, Kansas Governor Sam Brownback--all have tried this gambit and failed. Sharp increases in debt followed their much-ballyhooed tax cuts.
Adding to this reality-bending dreamscape is the sudden appearance of the flaws in Congresswoman Noem's tale of tax-devastation to her family in 1994 when her father died. She claims her family was knocked for a loop by the "death tax." But an examination of her story last week in USA Today headlines that Noem's "family saga doesn't add up." The piece concludes that the story "does not line up with some very basic tenets of the tax code." The bit about not "adding up" seems appropo. Not much in this tax bill adds up.