Congress has spent much of this year struggling to produce an "economic recovery" tax bill. Now, such a bill is before the Senate. The details remain uncertain, but one thing is sure: The measure will do little to boost the economy. And the fact that lawmakers have strained so much to produce this pea speaks volumes about the failures of leadership in Washington.
Not that the effort didn't get off to a quick start. After President Bush proposed an assortment of tax changes--including a capital-gains rate cut and new incentives for savers, investors, and home buyers--in his State of the Union message, Congress took up the measure quickly and had a bill on the President's desk by March. But because Democratic lawmakers tacked on a "millionaire's tax"--through mixed motives of fiscal responsibility and political point-scoring--Bush vetoed the bill, then seemed to lose interest for months.
But the tax bill wouldn't go away, because nearly everyone wants to extend the research and experimentation tax credit and an assortment of other credits expiring this year. These "extenders" are the driving force behind the certainty of some sort of tax legislation in 1992. That has kept members of the House and Senate tax-writing committees redrafting their pet provisions, while the lobbyists keep on lobbying. Along the way, versions of the bill have acquired such misguided provisions as a new tax break for the owners of existing commercial real estate and a punitive tariff on Japanese minivans.
The U.S. economy desperately needs higher savings and more investment. But the 1992 tax bill in any of its permutations will have only a marginal effect on the economy. It has simply become an election-year waste of everyone's time.