Opinion

The Great Debate

Watergate: Are we there yet?

President Barack Obama at a news conference in the White House press briefing room in Washington, March 6, 2012. REUTERS/Jason Reed

O.K., you know the one about the old guys sitting in the diner:

“When I was a boy, I had to walk five miles to school in the snow.”

“Snow?  I had to walk five miles in the snow with just newspapers on my feet.”

“Feet?  You had feet?”

That’s what it feels like when you lived through Watergate and the scandal decades that followed it. I was in Washington — sentient, glued to the tube, writing about it all. And Leonard Garment, my husband and the special counsel to President Richard M. Nixon, was often the one in the center of the press mob, looking as if he wasn’t going to escape with his life. Then you read last weekend’s news reports about scandal politics “sweeping Washington.” Come on, people. Get a grip.

Watergate was about hubris, the Kennedy assassination, Vietnam, the culture wars and the darkest of angers — both within Nixon and against him. The current agglomeration is about bureaucracies, the zeitgeist and garden variety political calculation.

Bearing in mind the all-purpose scandal caveat — the other shoe may always drop — it looks like what we have in the news is three distinct scandals, each emblematic of a different American political phenomenon.

Fixing ‘too-big-to-fail’

The United States is plagued by large corporations with outsized political power. They are “too big to fail.” So if they are about to fail, they get rescued. Many are so big that they can block the laws needed to stop them from destroying the economy or the environment.

We need to replace them with smaller companies, but U.S. antitrust law is inadequate. It exists, but has been weakened over the past decades. Consider the proposed “Volcker Rule,” which would make many banks split into two companies, one for risky investments and one for loans based on savings, as the old Glass-Steagall law required.  This would address some problems, but would not make banks small enough.  Eliminating “too big to fail” banks means making sure that each is small enough that regulators, prosecutors and elected officials won’t hesitate to let it suffer the consequences of its own decisions.

Using anti-trust law now to split up a company requires a lawsuit, and many large companies can make that costly – as Microsoft did each time it was convicted. Corporations can also use their political influence to avoid being split, as Microsoft did when last convicted.

To bridge the deficit, collect some taxes

By David Callahan

The views expressed are his own.

At a time when the U.S. government needs every dollar of revenue it can get, alarm bells should be sounding in Washington about a new IRS study showing that the Treasury is losing a fortune to tax evasion.

The study, released last Friday, found that the government missed out on $385 billion in uncollected taxes in 2006, the most recent year for which the IRS has complete data. If we extrapolate the IRS’s assumption that the U.S. government only collects about 85 percent of total tax liabilities, the revenue lost by the Treasury in the past decade exceeds $3 trillion.

That is serious money–nearly equal to all the new federal debt incurred during the Bush years. And without tougher action against tax cheats, the U.S. government stands to lose trillions more over the next decade.

from David Cay Johnston:

Time to junk income taxes?

This is America's 100th year for individual income tax, a system as out of touch with our era as digital music is with the hand-cranked Victrola music players of 1912. It is also the 26th year of the Reagan-era reform for both personal and corporate tax, a grand design now buried under special-interest favors.

With U.S. elections in November, and the George W. Bush tax cuts due to expire at the end of 2012, it's time for a debate that goes beyond ginning up anger over taxes and the superficial issue of tax rates.

It's time to consider whether to get rid of income taxes, personal and corporate. What are the strengths and weaknesses of our current system? Should we tax individual and corporate income -- or something else?

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