Let’s say you have a favorite clothing store.
During its summer slow time, the store invites you to take part, as a favored customer, in a special sale.
Later, after Labor Day, when fall fashions are in, you visit the store and its prices are back to normal.
Would you blast the store for jacking up prices?
I doubt you would. If I’m wrong, remind me never to go shopping with you.
This little hypothetical brings me, of course, to the U.S. Congress.
Congress, as you know, is desperately seeking ways to shrink the federal deficit.
Well, here’s one. The New York Times reports that targeted tax breaks for favored corporations and business sectors deny the federal treasury at least $123 billion a year in potential revenue.
Even in the realm of ginormous deficits, that’s some serious shekels.
Beneficiaries of these “rifle shot” tax breaks include craft brewers in Boston, racehorse breeders in Kentucky, and toy arrow makers in Oregon.
You’d think cutting out such special-interest nonsense would be a no-brainer.
Nope. For all their blustering about deficits, our representatives can’t bring themselves to cancel business perks they doled out in happier times.
This is a bipartisan blind spot. As the Times reports, liberal John Kerry keeps pitching for Beantown brewers, while Republican Mitch McConnell keeps cheering on those bluegrass thoroughbreds.
Each congressional caucus suffers from its own peculiar delusion.
Conservatives have convinced themselves that ending a cozy tax break for a favored company – in other words, a special sale price – is the same as raising prices for the mass of their customers, in other words the American middle class. It is not. .
Liberals, despite vast evidence to the contrary, cling to the notion that they are good at picking winners in the free-market economy. All some executive has to do is mumble the word “jobs,” and they fall over themselves to dish out breaks. Rarely do they check back to see if the largess produces benefits to anyone but those who own the company.
I’d like to see government get out of the business of trying to boost particular players in the free market, and stick to its core economic tasks: good schools, solid infrastructure, smart regulation, and path-blazing research.
But that’s one sale that’s awfully hard to make with the geniuses on Capitol Hill.