Don't Make Section 501(c)(4) The Patsy of the IRS Scandal

The Visalia Times-Delta recently published an editorial of mine defending section 501(c)(4) organizations that have been vilified as of late as a reactionary response to the IRS tea party scandal.  I defend both their tax-exempt status and the fact that donors' names are kept confidential. 

How the Prop 8 Ruling Threatens Prop 13 (and other future tax reforms)

California's ballot initiative process is vital to Californians and helps ensure that the will of the people is expressed, even when California politicians are uncooperative.  Over the years, ballot initiatives have been proposed and passed that have advanced both liberal and conservative causes.  In each of these cases, the initiative process was the only way to advance these issues as the legislature would not, or could not, pass effective legislation. 

While the recent Supreme Court case on Proposition 8 may have advanced gay marriage, its unintended consequence is to put into question the sustainability and power of future ballot initiatives.  Justice Scalia ruled, in essence, that the defenders of the Prop 8 initiative did not have standing to sue because only the State of California had standing to defend Prop 8 from attacks.  While Gov. Brown and Kamala Harris, the State A.G., put up a begrudging defense of Prop 8 at the trial level, they opted not to appeal the trial court decision finding Prop 8 unconstitutional.  Defenders of Prop 8 then stepped in and decided to appeal.  The California Supreme Court held that clearly, the Prop 8 defenders had standing and could appeal the decision and were essentially representing the interests of the State. 

Unfortunately, Justice Scalia's holding now weakens almost any ballot initiative--especially those that the Governor and Attorney General personally dislike. Consider the following hypothetical.  A homeowner sues alleging that Prop 13 violates their equal protection because their neighbor who bought their home 50 years ago pays much less than they do for their new home, despite the fact the homes are identical and have the same value.  Although merit less, the Governor and state AG could opt to not defend the suit.  All of a sudden, an injunction is issued finding Prop 13 to be unconstitutional.  The State decides it won't pursue an appeal and the defenders of Prop 13 have no standing in federal court to pursue an appeal either.

In a single opinion, Justice Scalia was able to do something many California politicians have been trying to do for year--weaken the initiative process. 

The IRS Targeting Scandal--An Engaging Infographic

Below is a fascinating infographic that attempts to fill-in the details and give the back story of the IRS tea-party targeting scandal.  (admittedly the tone is a bit left-leaning)

Source: TopAccountingDegrees.org

Vote For "La Wendy"--Worst Political Support Song Ever Written

Democratic LA mayoral candidate Wendy Greuel has received heavy union support compared to fellow democratic candidate Eric Garcetti.

In perhaps the worst demonstration of political support the LA hotel workers union wrote and sang a song urging citizens to vote for "la Wendy". Union officials translated the Spanish lyrics into English. Here's a portion of the words:

"If for la Wendy you want to vote

Get in the car and let's have fun.

And for la Wendy to win

All Latinos got to have her back.

If you want to earn $15 an hour

You have to march for la Wendy.

If the blond comes to your door

Open the door and let her in.

Wendy, la Wendy we're gonna vote.

$15 an hour we'll make.

Wendy, la Wendy we're gonna dance.

Eric Garcetti start crying.

From Montecito to Huntington Park

Passing El Sereno, eating tamales

And the voters for you will fight.

We'll have extra money to spend.

The people will support you.

That's why the blond will triumph.

In the truck we'll celebrate

With the mariachis we'll sing

Her last name is difficult to sing

That's why we're writing this rhyme.

La Wendy, Los Angeles you will change

And the Latino vote will crown you."

A Rational Explanation for the Targeting of Tea Party Groups by the IRS?

Although the inspector general of the U.S. Treasury is set to release a report on Wednesday detailing the increased scrutiny certain tea party groups received in their 501(c)(4) applications, a Duke tax law professor, Richard Schmalbeck, was at the ABA meeting where this was first disclosed and has shared his thoughts:

From the Tax Prof Blog: 

I was at the Exempt Organizations Committee meeting of the ABA Tax Section meeting when Lois Lerner, the director of the division that handles exempt organizations matters, dropped the bombshell that is in the papers today, and generating a lot of media outrage, especially but not exclusively on Fox News. I think her explanation in person was probably better than the statement that the IRS released, at least in terms of explaining why some exemption applications actually require more scrutiny than others.

The IRS position on 501(c)(4) organizations ("social welfare organizations")is that, while they can engage in campaign activities, they cannot do so as their primary activity—which they understand as more than 50% of the organization's activities. Many organizations that seek this status probably should be section 527 political organizations rather than social welfare organizations. So when the service center in Cincinnati, which handles exemption applications, was inundated with unusually large numbers of (c)(4) applications, they tried to find ways to triage them, so that the traditional social welfare organizations would not have their processing held up, but organizations that might be close to the 50% campaign activity zone would get the appropriate level of scrutiny. In developing ways to identify the applications requiring attention, one of the tests that somebody decided would work is whether the organization had "tea party" or "patriot" in its name. The IRS did also look at other organizations with potential for abuse of the social welfare organization status, but apparently did not come up with any shorthand ways of identifying any such organizations that did not have "tea party" or "patriot" in their names.

This was obviously a bad idea for a number of reasons, including its political asymmetry. But a) it didn't come from the top—Lois is herself a career employee, and it was a decision made somewhere below her level; and b) it did not involve scrutiny that was inappropriate under the circumstances. The content of some of the scrutiny may have been inappropriate, however, in seeking names of donors, which is not ordinarily done. (Even here, I can imagine some basis for thinking this was relevant to the inquiry: if all an organization's funds were coming from a party, or other 527 organizations, it would be a matter of some concern, and raise a somewhat higher suspicion that the organization was being used to finance campaign activities primarily. And while public disclosure of donors is not required, there is no absolute bar on the IRS seeking information about donors. They do it routinely in their efforts to determine private foundation status and compliance, since major donors are disqualified persons for purposes of the private foundation excise taxes. I should emphasize that Lois did not offer this explanation however—it is just my speculation on why IRS staff might have asked that question.)

I think the problem is that if you hear that tea party organizations were "targeted" for special scrutiny, it is hard to imagine an explanation that doesn't depend on partisan bias. But there is such an explanation: the need to draw the line between (c)(4) and 527 organizations. I'm not saying that this was the right way to go about this, and neither is Lois or anyone else in the IRS. But at the same time, it isn't the smoking gun that some in the media seem to think it is. It is nothing like Richard Nixon asking the IRS to audit his political enemies, though it is being compared to that.

Some additional headlines on this matter: 

American Thinker:  IRS Scandal Deepens: High Officials Knew of Tea Party Targeting in 2011

CNN:  IRS Abuses Power in Targeting Tea Party

Fox News:  Republicans Slam IRS Targeting of Tea Party as 'Chilling,' a Form of Intimidation

The Hill:  Rep. Issa: IRS apology to Tea Party Groups ‘Not an Honest One’

Legal Insurrection:  IRS Reaped Hatred of Tea Party Sown by Democrats and the Media, by William   Jacobson (Cornell)

Legal Insurrection:  The Washington Post leads on the #IRScandal ... Who Will Follow?

Mother Jones:  The IRS Shoots Itself in the Foot, Then Reloads

New York Post:  The Nixon Wing at the IRS

New York Times:  IRS Focus on Conservatives Gives G.O.P. an Issue to Seize On

Politico:  5 Questions on the IRS Debacle

Reuters:  IRS Kept Shifting Targets in Tax-Exempt Groups Scrutiny: Report

The Volokh Conspiracy:  IRS Scrutinized Teaching the Constitution, by Jonathan Adler (Case Western)

Wall Street Journal:  Wider Problems Found at IRS: Probe Says Tax Agency Used Sweeping Criteria to Scrutinize Conservative Groups

Washington Examiner:  Conservatives Want Congress to Audit IRS for Targeting Tea Party

Washington Post:  IRS Targeted Groups That Criticized the Government, IG Report Says 

Washington Tims:  IRS Scandal Grows to Include Debt Critics

The Unflappable Iron Lady

In honor of Margaret Thatcher's life I have attached a short clip of a British House of Commons debate with the Iron Lady taking on any who wished to step into the ring with her.  Too bad we don't have any similar forum here in the U.S.

High-Speed Boondoggle? $800 Million to Save 10 Minutes

Admit it.  When the federal government talks of investing huge sums of money into high-speed rail you picture aerodynamic bullet trains humming along at 220 miles per hour. 

So when the government proclaims that it has invested $12 billion into "high-speed rail" you presume that those funds will be used to fund actual high-speed rail projects.  Not so says CNN's Drew Griffin who has released another expose on where these funds are actually going.

To sum up Drew's report, the $12 billion dollars is being used to make conventional freight trains a wee bit faster.  In essence, while the public was sold on bullet trains, the monies are really just being used to improve conventional rail lines. 

The cornerstone of Drew's report is the fact that $800 million in taxpayer "high-speed rail" funds were used to improve conventional rail track between Seattle and Portland.  The big pay-off?  Shaving 10 minutes off the travel time.

The CNN video report can be seen here.

A Depressing Look at the CA Sec. of State's Office: why it takes CA 43 days to do what TX does in 5

I've always wondered why it takes week for the CA Sec. of State's Office to process business filings. Often these delays prevent business owners from getting licenses and opening bank accounts.  I was surprised to learn (not really though) that it only takes New York seven days and Texas five days to process similar filings.

Recently, Debra Bowen, the Secretary of State was grilled in front of the CA legislature and it wasn't a pretty picture.  It revealed an office so out of date that it actually relies on 3 x 5 index cards as its filing system.

More from the OC Register:

"I almost needed smelling salts the first day I took a tour of the Secretary of State's office," said Bowen, a former Marina Del Rey legislator who was first elected California's chief elections officer and business records clerk in 2006. "It was just so incredibly paper-driven."
Bowen's office has taken heat in recent days after it was revealed that her staff was taking 43 days to process business filings. As Assembly Budget Committee staff reported, this backlog delays businesses from starting up or hiring employees and postpones business tax payments.
New York processes such documents in seven days, committee staff found. Texas, five days.
"There is a scoreboard," Daly said, referring to the other states' better turnaround times. "At some point, the time for excuses is over."
Bowen says her office needs $8.9 million in new money over the next fiscal year, and millions more after that, to fund dozens of new staff positions necessary to handle the workload and reduce the backlog until a new, digital filing system comes online in 2016.
That new system, known as California Business Connect, will create a central records database and put the Secretary of State's services on the Internet. But Bowen complained that the state's procurement process is needlessly protracted and requires her to spend "a ridiculous amount of money" just on the paperwork to "get the project on the docket to get done."
"We spend a year getting the feasibility report done. Then it takes a several months after that to hire a contractor to write the request for proposal. That's another three to four months – it could be even longer than that," Bowen told the subcommittee. "That one was approved by the Legislature in July of 2011. The request for proposal, the RFP, was released in August 2012. Draft bids from vendors were submitted in late January of this year and are currently being reviewed.
"So ... the normal processing time for a large IT project ... you get to 2016," she said. "That has to be changed."
Further complicating matters, Bowen said, is her office building's lack of outlets and her staff's requirement to use the state Department of General Services to procure rewiring services. She specifically asked the committee for authority to pursue the rewiring on her own, without the assistance of the department, which acts as the "business manager" for other state agencies.

Over-Hyped Sequestration Amounts to One Week's Worth of Spending Cuts

Given the amount of doom and gloom that is reported surrounding the impending sequestration cuts, one may be surprised to learn that the cuts will result in a decrease in projected spending by only 2.3%.  Hardly an unmanageable amount.

Put another way, it would be equivalent to having Federal spending take a week long holiday.

Despite these figures, sequestration has been presented by politicians and the media as the next "cliff" (didn't we just avert one a few weeks ago?).  For instance, just this weekend, the White House released a menacing 7 page memorandum listing all the programs, services and agencies that would be affected.  Obviously, the list is meant to incite emotion and evoke fear.  After all, the document tells us that their will be cuts to food safety inspectors, airport security, national parks, education, amongst many, many more.

As I read through the list, I couldn't help but remember a similar menacing list produced by Governor Jerry Brown in his campaign to pass Proposition 30.  Californians were told that if we didn't vote for increased taxes, key government services would be shut down.  In fact, the Governor even released the names of dozens of state parks that were to be "closed" in the event that Proposition 30 did not pass.  These scare tactics apparently worked and Proposition 30 ultimately passed.  Of course, its passage seemed to only wet the appetite of those who have always sought increased taxes--within weeks the democratic super majority was alluding to other ways to increase revenues.

The pattern is clear.  If you want create the perception that a small decrease in spending will have terrible consequences, you have to place on the chopping block those services that are most near and dear to taxpayers--public safety.  I am not saying that public safety will actually be cut, but the government will publicize "planned" cuts to public safety more than anything else.  I suspect though that sequestration will not result in a drastic drop in public safety as the politicians would lead us to believe.

Pres. Obama Lectured on the 10% Biblical Tithe and the U.S. Tax System

On Thursday's National Prayer Breakfast, renowned neurosurgeon Dr. Benjamin Carson gave a 25 minute address that lambasted political correctness, proposed changes to Obamacare and urged tax reform.

One of his more interesting discussions delved into "fairness" and the U.S. tax system.

He argued:

"What about our taxation system? So complex there is no one who can possibly comply with every jot and tittle of our tax system. If I wanted to get you, I could get you on a tax issue. That doesn't make any sense. What we need to do is come up with something that is simple.
When I pick up my Bible, you know what I see? I see the fairest individual in the Universe, God, and he's given us a system. It's called tithe. Now we don't necessarily have to do it 10% but it's principle. He didn't say, if your crops fail, don't give me any tithes. He didn't say, if you have a bumper crop, give me triple tithes. So there must be something inherently fair about proportionality. You make $10 Billion dollars you put in a Billion. You make $10 you put in $1 - of course, you gotta get rid of the loopholes, but now now some people say, that's not fair because it doesn't hurt the guy who made $10 Billion dollars as much as the guy who made $10. Where does it say you have to hurt the guy. He's just put in a billion in the pot. We don't need to hurt him.
It's that kind of thinking - it's that kind of thinking that has resulted in 602 banks in the Cayman Islands."

What We Can Learn From the 100th Anniversary of the Federal Income Tax

Just a few days ago marked the 100th anniversary of the ratification of the 16th Amendment, which enabled the establishment of the U.S. federal income tax.

The 16th Amendment has a fascinating political history and the fact that there was popular support for the self-imposition of additional taxes was somewhat unique.  However, the 16th Amendment was never intentioned to be the federal government's main source of revenues.  Indeed, when it was being promoted, it was marketed as "just 1% on the top 1%"--meaning that only the top 1% of earners would be subject to the tax, which rates began at just 1%.  After all, who could be against such a tax? As the House of Representatives Committee Report indicated "all good citizens, it is therefore believed, will willingly and cheerfully support and sustain this, the fairest and cheapest of all taxes".

Over the years, the rates went up and up and the percentage of those actually subject to the income tax increased as well.  What was envisioned as a "soak the rich" tax, ultimately "soaked" the middle class as well. 

California Out of Funds to Disarm 19,700 Felons and Mentally Ill People

I was surprised to find out that California already has laws in place that enable it to confiscate weapons from the mentally ill in addition to convicted felons.  Unfortunately, the State does not apparently have the funds to actually go out and seize the weapons.

From the LA Times:

SACRAMENTO — California authorities are empowered to seize weapons owned by convicted felons and people with mental illness, but staff shortages and funding cuts have left a backlog of more than 19,700 people to disarm, a law enforcement official said Tuesday.

Those gun owners have roughly 39,000 firearms, said Stephen Lindley, chief of the Bureau of Firearms for the state Department of Justice, testifying at a joint legislative hearing. His office lacks enough staff to confiscate all the weapons, which are recorded in the state's Armed Prohibited Persons database, he said.

The gun owners typically acquired the firearms legally, before being convicted of a felony or diagnosed with mental illness. Each year, the state investigates and seizes the guns of about 2,000 people on the Armed Prohibited Persons list, Lindley said, but each year about 3,000 names are added to the list.

"Despite our best efforts, the bureau does not have the funding or resources to keep up with this annual influx," he told the 15 assembled lawmakers.

Grover's Anti-Tax Pledge Spreads to Italy

So Grover Norquist's anti-tax pledge has spread to Italy, and beyond: 

Today, as questions loom in the U.S. over whether the recent fiscal cliff negotiations show Norquist's pledge is dead, the conservative anti-tax activist's signature document is proving its tenacity by spreading its tentacles of influence to another unlikely place: Europe.

A group called Tea Party Italia, inspired by the tea party movement in the U.S. and by Norquist's pledge, created a similar taxpayer contract it is pushing ahead of the country's general election next month. The pledge says politicians won't raise taxes and will work to reduce the country's debt, which the Associated Press reports hit a record $2.64 trillion in December.

David Mazzerelli, a co-founder of the Italian tea party group, tells Whispers that getting supporters hasn't been a problem. The group has hosted 200 mostly well-attended events over the last several years, he says. But getting politicians to sign on to the pledge might prove more of a challenge.
"Candidates in the U.S. want to sign this pledge because they have to do a difficult and hard campaign," he says. Italian candidates, on the other hand, are chosen by the party and don't go through a campaign season. "So it's very difficult to find [politicians] that believe in our ideas in Italy."

2013 Tax Surprise--Everyone Pays More

While the media focused myopically on the impending changes in tax rates as part of the fiscal cliff negotiations, scant attention was given to the scheduled and automatic expiration of the payroll tax holiday--namely, an increase from 4.2% to 6.2%.

Because of this lack of coverage many low and middle-income Americans, contrary to what they had expected and understood, face a sober reality that their taxes will increase by a substantial degree.  It is estimated that this increase will result in an average of $2,000 in extra taxes for middle-income families during 2013.    

Notably, the tax burden will rise more for someone making $30,000 a year (1.7%) than it does for someone earning $500,000 a year (1.3%) 

Is the New $450,000 Threshold of "Increased" Taxes Political Fiction?

From the Wall Street Journal, The Stealth Tax Hike:

Anyone still need a reason to abandon "grand bargains" and deals negotiated between this President and GOP Congressional leaders? Here it is: The revival of two dormant provisions of the tax code means the much ballyhooed $450,000 income threshold for the highest tax rate is largely fake.

The two provisions are the infamous PEP and Pease, which aficionados of stealth tax increases will recognize immediately as relics of the 1990 tax increase. Those measures, which limit deductions and exemptions for higher-income taxpayers, expired in 2010. The Obama tax bill revived them this week. It isn't going to be pretty.

Under the new law, some of the steepest tax increases may fall on upper-middle class earners with incomes just above $250,000.

...

A store manager married to a dentist with a combined income of, say, $350,000 may pay a higher tax rate under the new law than if the tax code had simply reverted back to the Clinton-era rates that Mr. Obama championed. Those earning more than $450,000 would see their de facto tax rate rise to about 41% under the new law, not 39.6%. Add in the new ObamaCare investment taxes and the tax rate on interest income is close to 45%.

...

Democrats are advertising the higher $400,000-$450,000 threshold as a victory for affluent taxpayers in blue states. But with PEP and Pease these Democrats are hammering their own constituents via the backdoor.

If your wondering just how much your taxes will be affected in 2013 compared to 2012, the nonpartisan Tax Policy Center in Washington has updated an easy-to-use calculator that will help you estimate your 2013 tax bill. It offers results for typical taxpayers from the lowest to the highest incomes, and also has a feature allowing users to create their own example.  It’s available here.

Remembering Robert Bork

Robert Bork died this morning at the age of 85.  He was nominated by Ronald Reagan to serve as a Justice of the US Supreme Court but faced fierce opposition (albeit, unjustified) in the Senate.  He was not confirmed and ultimately resigned as an appellate justice.

After retirement he wrote several books.  Two of which are on my top ten list of favorite books:  Slouching Towards Gomorrah and the Tempting of America.  Despite the unfair attacks he suffered he was reportedly always good-natured and upbeat. 

Income Tax Rates Rise...Revenues Fall: The UK's Vanishing Millionaires

From the WSJ editorial page, Britain's Missing Millionaires: Income tax Rates Rise but Revenues Fall:

A funny thing often happens on the way to soaking the rich: They don't stick around for the bath. Take Britain, where Her Majesty's Revenue and Customs service reports that the number of taxpayers declaring £1 million a year in income fell by more than 60% in fiscal 2010-2011 from the year before.

That was the year that millionaires became liable for the 50% income-tax rate that Gordon Brown's government introduced in its final days in 2010, up from the previous 40% rate. Lo, the total number of millionaire tax filers plunged to 6,000 in 2010-2011, from 16,000 in 2009-2010.

The new tax was meant to raise about £2.5 billion more revenue. So much for that. In 2009-2010 British millionaires contributed about £13.4 billion to the public coffers, or just under 9% of the total tax liability of all taxpayers that year. At the 50% rate, the shrunken pool yielded £6.5 billion, or about 4.4%....

Politicians would love to lay the whole burden of their policies on a tiny minority of the rich, but you can't finance the welfare state on the shoulders of the 1%. That's something for the U.S. to remember as President Obama pretends he can fill a $1 trillion budget hole with tax hikes on "millionaires and billionaires."

(Hat Tip: Tax Prof Blog)

Are Tax Hikes The Cure For CA Budget Woes?

One can only wait and see how the Passage of Prop 30 will affect California, but politcal cartoonist Michael Ramirez has his own take.

(Coutesy of National Review)

As Goes San Bernardino, So Goes CA?

There is an absolute must-read article from Reuters that examines San Bernardino's downward spiral in exhaustive detail.

Below are some of the tidbits that were shocking:

Yet on close examination, the city's decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America's largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers. 

Little by little, over many years, the salaries and retirement benefits of San Bernardino's city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

...

In bankrupt San Bernardino, a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension.

 ...

San Bernardino's biggest creditor, by far, is Calpers, the public-employee pension fund. The city says it owes Calpers $143 million; using a different calculation, Calpers says the city would have to pay $320 million if it left the plan immediately.
Second on the city's list of creditors are holders of $46 million worth of pension bonds -- money borrowed in 2005 to pay off Calpers. The total pension-related debts are more than double the $92 million owed to the city's next 18 largest creditors combined.
Complicating matters were obscure budgeting procedures that left residents in the dark. The word "pension" doesn't appear once in the most recent 642-page budget, and retiree costs are buried in detailed departmental line items.

Yet even in bankruptcy, reducing pension costs by cutting benefits is not an option - at least according to Calpers.
The pension agency says the benefits are carved in stone, arguing that from the day a worker is hired, the pension plan in place on that day for that person can never be reduced in value under any circumstances, including municipal bankruptcy.
That argument has never been tested in court: When the Bay Area city of Vallejo went bankrupt in 2008, it declined to challenge the pension payments to Calpers, in part because of the daunting legal costs involved.
But the pension-bond insurers who are now on the hook for defaulted bonds in both Stockton and San Bernardino have signaled their intention to do battle with Calpers in bankruptcy court. San Bernardino, in an unprecedented move, has already stopped making payments to Calpers.

So Did The Wall Street CEOs Actually Call For Tax Hikes to Fix the Deficit?

On Thursday, the Wall Street Journal published a letter from over 100 major CEOs apparently calling for tax hikes in an effort to reduce the deficit.

Almost immediately, the letter was cited as proof that any position which did not accept the idea of tax increases as a prime vehicle to decrease the debt was indefensible. 

The Wall Street Journal editorial board, has taken a different interpretation in its editorial:  CEOs to the Tax Rescue? Liberals Confuse a Pro-Growth Plea With a Tax-Rate Hike:

Two words: game, change. On Thursday a 100-strong group of major business leaders did a Warren Buffett and endorsed a big tax hike, even if it means they'll have to pay more themselves. The support of this CEO lobby could break the Republican dead-enders who oppose all taxes and finally clear the way for a glorious bargain of tax increases and spending cuts to reduce the deficit. 

If you've seen this news story, don't worry. It's all a fantasy, albeit one that appeals to certain political types, who are reading their own priorities into the latest CEO petition on debt and taxes. The reality is that the chief executives who this week signed on to a "core set of principles" on budget reform are more than anything else scorching President Obama's lack of leadership. ...

The CEOs favor a framework that would "stabilize the debt as a share of the economy, and put it on a downward path." ... The CEOs also want to "reform Medicare and Medicaid" and do more to control national health spending. ... Only then—as a condition of structural entitlement reform, including Social Security—do the CEOs back "comprehensive and pro-growth tax reform, which broadens the base, lowers the rates, raises revenues and reduces the deficit." Note that reference to tax reform and lower rates, not the standard Beltway trade of certain tax increases for the promise of spending cuts that never happen.

The folks who are treating this as an extraordinary political breakthrough have apparently come down with a case of Romnesia, to borrow the President's coinage: Mitt Romney has been running on exactly such a tax reform for nearly a year, using exactly those principles....

What the CEOs we know really want is faster economic growth, the policies to promote it, and a Washington political class that can pass those policies. The politicos claiming that this rather anodyne CEO debt proclamation will make it easier for Mr. Obama to "raise taxes" are the same ones who merely want him to raise taxes.

 Hat Tip (Tax Prof.)