Welcome to Tax Vox’s fifth annual Lump of Coal Award recognizing 2011’s ten worst moments in fiscal policy. It is hard to imagine so much ugliness crammed into a mere 12 months. But after much thought and debate, the winners are:
10. The rating agency Standard & Poor’s for downgrading U.S. debt based upon a $2 trillion math error. Then, after the mistake was pointed out, claiming the numbers didn’t really matter. This from the same folks who for years could not smell the stench rising from piles of subprime mortgage debt.
8. President Obama’s newfound populism. Railing against a system of taxes that benefits millionaires and billionaires seems like pretty good Democratic politics. But Obama would be a lot more credible if he hadn’t helped extend the very law that makes it possible.
6. The Super Committee. John Kennedy paraphrased the Gospel of Luke when he said, “To those whom much is given, much is expected.” I suppose in the case of the unfortunate super committee, nothing was given. And they met expectations.
5. The payroll tax fiasco. Let’s see if I understand. Democrats finally found a tax cut they loved. Republicans finally found one they hated. Now Democrats insist on extending the 2011 payroll tax break for just two months while House Republicans want to keep it going for a full year. As they used to say at the ballpark, “You can’t tell the players without a program.”
4. Rick Perry’s tax reform plan. Here are three reasons why it makes no sense: It adds trillions to the deficit. It is deeply regressive. And, um….
3. The European Union. A special international Lump of Coal Award goes to les politicians and bureaucrats who can’t seem to get out of their own way. If you need your cheese regulated, this is your crowd. If you want a functioning economic union, you may want to look elsewhere.
2. Newt Gingrich’s tax reform. So what if it would add $1 trillion a year to the deficit, largely by giving those earning $1 million or more an average tax cut exceeding $600,000. As Gingrich himself would tell you, it is a remarkable, historic idea. Yes, it is.
1. Congress. Perhaps not since 1861 has a Congress performed as poorly. In the end, lawmakers seem to have accomplished only two things: They (barely) kept the government running while driving public confidence in their ability to govern into the single digits. For governing on the principle of mutually assured destruction and building a record of historic failure in the face of real fiscal and economic challenges, the 2011 Lump of Coal Award goes to the entire U.S. Congress.