Recent tax policy debate has focused on two proposals:
- Let the Bush tax cuts, or at least the top two rates, expire as scheduled (again) on Dec. 31 and
- Implement the Buffett Rule to make millionaires pay a tax rate of at least 30 percent.
Although these two tax proposals are about different areas of taxation, they share one interesting component. Both are named for a person.
Obama was on the road Tuesday (April 10) touting the Buffett Rule, which gets its moniker from financier Warren Buffett. The uber rich Oracle of Omaha ratcheted up the debate over how the wealthy should be taxed with his comments last year about his tax rate vs. that of his secretary.
Meanwhile, the current president's immediate predecessor, for whom our current tax rates are named, was addressing the New York Historical Society for the George W. Bush Presidential Center's conference on "Tax Policies For 4% Growth."
During his remarks opening the conference, George W. Bush noted that he wished his Administration's hallmark tax policy didn't still bear his name.
"I wish they weren't called the Bush tax cuts," the 43rd president said. "If they were called some other body's tax cuts, they'd probably be less likely to be raised."
W's comment about "Bush tax cuts" is at the 3 minute, 26 second mark.
W's wish to distance himself from the current tax rates is not new.
Back in December 2010 when his tax policies were set to originally expire, the former president appeared on a radio program and said, "I wish they'd call it something other than the Bush tax cuts and therefore there probably would be less angst amongst some to pass it."
A name change also has been suggested, only partly in jest, for the Buffett Rule, which would set a minimum tax rate of 30 percent for millionaires.
Obama today said it could be called the Reagan Rule since the Republican icon supported the basic concept of tax fairness.
Other 'personal' financial laws: While there might be some backing away of naming rights for the Bush tax cuts and the Buffett Rule, they are just two of several tax and/or financial laws or policies that are known by the people most closely associated with them.
We have the Roth IRA. This tax-free personal retirement plan was created as part of the Taxpayer Relief Act of 1997 and named for its chief legislative sponsor, the late U.S. Sen. William Roth of Delaware.
There's the Coverdell Education Savings Account. When this tax-favored school expenses account was revamped from its Education IRA origins, it also was renamed for its primary champion in the U.S. Senate, the late Sen. Paul Coverdell of Georgia.
Another education assistance program is the Stafford Loan. This low-cost student loan, which comes in both government subsidized and unsubsidized forms, was renamed in 1988 to honor the late Robert T. Stafford, a U.S. Senator who represented Vermont and whose work on higher education reform was respected by his Capitol Hill colleagues.
Last year the Bowles-Simpson Plan got a lot of attention and resurfaced a couple of weeks ago during the House budget debate. This proposal is named for former Clinton Administration Chief of Staff Erskine Bowles and former U.S. Sen. Alan Simpson of Wyoming, the co-chairs selected by Obama to find ways to reduce the deficit and reform our tax system.
Going beyond taxes, we have the Dodd–Frank Wall Street Reform and Consumer Protection Act, which instituted wide-ranging regulatory reform in the nation's financial services industry. It gets its moniker from its champions former Sen. Chris Dodd of Connecticut and retiring Sen. Barney Frank of Massachusetts.
And part of Dodd-Frank is the Volcker Rule, named for former Federal Reserve Chairman Paul Volcker. This rule separates investment banking, private equity and proprietary trading (hedge fund) sections of financial institutions from their consumer lending arms. Or is supposed to.
More, broader named laws: Of course, these politically-named financial and tax laws also tend to bring to my mind a couple of other broader "laws" associated with their creators, especially at tax-filing time.
Most of us, as we struggle to fill out our 1040s, have at some point encountered Murphy's Law: "Whatever can go wrong, will go wrong, and at the worst possible time."
Remember that if you're considering doing your tax return late on April 17.
And the words of showman P.T. Barnum seem particularly prophetic as we watch tax and budget battles being fought in a presidential election year.
The circus impresario's Barnum Effect, "We've got something for everyone," leads naturally to the misattributed (how appropriate!) Barnum's Law: "There's a sucker born every minute."
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