Skip to main content
Part of complete coverage from

Here's something Congress could actually do

By Julian Zelizer, CNN Contributor
updated 7:54 AM EST, Mon November 25, 2013
CHICAGO - NOVEMBER 1: Current federal tax forms are distributed at the offices of the Internal Revenue Service November 1, 2005 in Chicago, Illinois. A presidential panel today recommended a complete overhaul of virtually every tax law for individuals and businesses. (Photo Illustration by Scott Olson/Getty Images)
CHICAGO - NOVEMBER 1: Current federal tax forms are distributed at the offices of the Internal Revenue Service November 1, 2005 in Chicago, Illinois. A presidential panel today recommended a complete overhaul of virtually every tax law for individuals and businesses. (Photo Illustration by Scott Olson/Getty Images)
STORY HIGHLIGHTS
  • Julian Zelizer: Sen. Max Baucus' proposed to reform taxes isn't as crazy as it sounds
  • He says Congress has reasons to want to reach agreement on tax reform
  • Both parties would gain some credibility with public that feel Congress can't do anything, he says
  • Zelizer: A deal on taxes would help cut deficit, close loopholes

Editor's note: Julian Zelizer is a professor of history and public affairs at Princeton University. He is the author of "Jimmy Carter" and "Governing America."

(CNN) -- On the surface, Montana Senator Max Baucus's proposal to reform the corporate tax code seems politically insane. The powerful chairman of the Senate Finance Committee has proposed tightening up the tax treatment of corporate profits overseas. The Senator, along with legislators in both parties, wants to use this proposal as the basis for broader loophole-closing reforms that also tackle the individual tax code.

Given how difficult it has been to pass any piece of legislation in recent years, it seems impossible that Congress will muster the energy or courage to challenge powerful interest groups that benefit from the status quo and to reform the tax code.

While loophole-closing tax reform might be good policy, it is hard to see how it can be good politics. "This is a big rock to push up the hill," warned Oregon Democrat Ron Wyden.

Julian Zelizer
Julian Zelizer

But in fact there is reason to believe that tax reform might have a chance to pass. The proposal comes at a good time. Congress is stuck in the mud. As an institution, Congress needs a big victory. Polls show that the approval ratings of Congress have reached all-time lows, now having fallen to an abysmal nine percent.

Although members of Congress tend to focus on their own electoral future, the public image of Congress has reached such a low point that the leaders of both parties are seriously concerned.

When public disapproval of the institution is so strong, it creates the environment for a possible "throw the bums" out atmosphere in which all parties are at risk for an anti-incumbent election.

Nothing can boost the image of Congress as an institution like a reform that benefits the public interest over private interests. Although achieving tax reform is extraordinarily difficult, Democrats and Republicans could walk away from a deal looking as if they were finally willing to take on the status quo in Washington and to defy the powerful interest groups who lurk on K Street. This might be enough to bolster public attitudes about the House and Senate going into the next couple of election cycles.

If Congress gores enough oxen, with both parties equally implicated in the reform, members could insulate themselves from the fallout—preventing one party from using this as an issue against the other--and strengthen their standing with the electorate as a result.

Both parties also stand to benefit from tax reform because it remains one of the best ways to raise revenue without raising taxes. One of the reasons that tax reform has always attracted the interest of fiscal conservatives is that cleaning up the tax code of its loopholes quickly raises more revenue.

Most fiscal conservatives understand that serious deficit reduction is only possible through a combination of tax hikes and spending cuts.

Although the United States has maintained a progressive tax code since 1913, few upper income individuals or corporations pay the actual higher rates since loopholes diminish their obligations. Occasionally, such as in 1969 and 1986, Congress has closed loopholes as a way to raise more money to curb the deficit.

Unlike 1986, this time the legislation would not be revenue neutral. The amount of money raised by closing loopholes would be more than the money saved by taxpayers enjoying lower rates, and that money could be used to help shrink the deficit. That could enable the grand bargain over deficit reduction that Democrats and Republicans have been unsuccessfully pursuing for years.

As occurred when Ronald Reagan was president in 1986, tax reform was an issue that both parties had an incentive to support. For unpopular Republicans, tax reform can offer evidence that the party is committed to fiscal responsibility and demonstrate that they are capable of governance.

Passage of the legislation would offer a contrast to the image that the party gained when it used the debt ceiling to try to force President Obama's hand on spending cuts. For Democrats, tax reform can shift the national agenda away from the problems with the roll out of the Affordable Care Act and toward a legislative accomplishment.

Finally, tax reforms can be one of the first tests of the post-filibuster reform Congress. The Senate voted to prevent filibusters on executive and judicial nominations. They did so through a majority vote, establishing for the first time that a majority was sufficient to change the rules.

Many experts predict that this precedent might scare senators from using the filibuster as much as in recent years, fearing that the tool might be eliminated altogether. It is thus possible that tax reform would now only require 51, rather than 60, votes in the Senate.

President Obama could desperately use a victory like tax reform. As the chances for passing immigration reform diminish, and the possibilities of achieving progress on climate change are nil, tax reform might be one of the few areas where progress is possible.

Ronald Reagan scored a big victory in 1986, one that remains a noted part of his record and legacy. Unfortunately, over time new loopholes were created and there is a need for another around of reform. The president should seize the moment, to make sure that his second term is not solely defined by the bitter partisan battles over the budget and health care.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Julian Zelizer.

ADVERTISEMENT
Part of complete coverage on
updated 9:42 PM EST, Fri December 19, 2014
Conservatives know easing the trade embargo with Cuba is good for America. They should just admit it, says Fareed Zakaria.
updated 8:12 PM EST, Fri December 19, 2014
We're a world away from Pakistan in geography, but not in sentiment, writes Donna Brazile.
updated 12:09 PM EST, Fri December 19, 2014
How about a world where we have murderers but no murders? The police still chase down criminals who commit murder, we have trials and justice is handed out...but no one dies.
updated 6:45 PM EST, Thu December 18, 2014
The U.S. must respond to North Korea's alleged hacking of Sony, says Christian Whiton. Failing to do so will only embolden it.
updated 4:34 PM EST, Fri December 19, 2014
President Obama has been flexing his executive muscles lately despite Democrat's losses, writes Gloria Borger
updated 2:51 PM EST, Thu December 18, 2014
Jeff Yang says the film industry's surrender will have lasting implications.
updated 4:13 PM EST, Thu December 18, 2014
Newt Gingrich: No one should underestimate the historic importance of the collapse of American defenses in the Sony Pictures attack.
updated 7:55 AM EST, Wed December 10, 2014
Dean Obeidallah asks how the genuine Stephen Colbert will do, compared to "Stephen Colbert"
updated 12:34 PM EST, Thu December 18, 2014
Some GOP politicians want drug tests for welfare recipients; Eric Liu says bailed-out execs should get equal treatment
updated 8:42 AM EST, Thu December 18, 2014
Louis Perez: Obama introduced a long-absent element of lucidity into U.S. policy on Cuba.
updated 12:40 PM EST, Tue December 16, 2014
The slaughter of more than 130 children by the Pakistani Taliban may prove as pivotal to Pakistan's security policy as the 9/11 attacks were for the U.S., says Peter Bergen.
updated 11:00 AM EST, Wed December 17, 2014
The Internet is an online extension of our own neighborhoods. It's time for us to take their protection just as seriously, says Arun Vishwanath.
updated 4:54 PM EST, Tue December 16, 2014
Gayle Lemmon says we must speak out for the right of children to education -- and peace
updated 5:23 AM EST, Wed December 17, 2014
Russia's economic woes just seem to be getting worse. How will President Vladimir Putin respond? Frida Ghitis gives her take.
updated 1:39 AM EST, Wed December 17, 2014
Australia has generally seen itself as detached from the threat of terrorism. The hostage incident this week may change that, writes Max Barry.
updated 3:20 PM EST, Fri December 12, 2014
Thomas Maier says the trove of letters the Kennedy family has tried to guard from public view gives insight into the Kennedy legacy and the history of era.
updated 9:56 AM EST, Mon December 15, 2014
Will Congress reform the CIA? It's probably best not to expect much from Washington. This is not the 1970s, and the chances for substantive reform are not good.
updated 4:01 PM EST, Mon December 15, 2014
From superstorms to droughts, not a week goes by without a major disruption somewhere in the U.S. But with the right planning, natural disasters don't have to be devastating.
updated 9:53 AM EST, Mon December 15, 2014
Would you rather be sexy or smart? Carol Costello says she hates this dumb question.
updated 5:53 PM EST, Sun December 14, 2014
A story about Pope Francis allegedly saying animals can go to heaven went viral late last week. The problem is that it wasn't true. Heidi Schlumpf looks at the discussion.
updated 10:50 AM EST, Sun December 14, 2014
Democratic leaders should wake up to the reality that the party's path to electoral power runs through the streets, where part of the party's base has been marching for months, says Errol Louis
updated 4:23 PM EST, Sat December 13, 2014
David Gergen: John Brennan deserves a national salute for his efforts to put the report about the CIA in perspective
updated 9:26 AM EST, Fri December 12, 2014
Anwar Sanders says that in some ways, cops and protesters are on the same side
updated 9:39 AM EST, Thu December 11, 2014
A view by Samir Naji, a Yemeni who was accused of serving in Osama bin Laden's security detail and imprisoned for nearly 13 years without charge in Guantanamo Bay
updated 12:38 PM EST, Sun December 14, 2014
S.E. Cupp asks: How much reality do you really want in your escapist TV fare?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT