Taxes & Banking (March 2010)

Whether you are a Democrat or a Republican, there is no denying that our system of financial regulation is in need of reform. We know our regulatory system is outdated; we know there are gaps in regulation; we know that there was no one monitoring the economy as a whole, and we know that some Wall Street companies were taking indefensible risks with no one on the beat to stop it from happening.  Since this broken system did not have the right tools to prevent this crisis, the American taxpayer was put on the hook.  It’s time to update this system by giving regulators the appropriate tools to monitor risks in the economy, and better protect consumers from unfair, deceptive and fraudulent products.

Today, nearly 1 in 10 Americans who want to work still cannot find a job. The recent economic downturn erased the certainty many families came to rely on, and they now turn to Washington for solutions. Unfortunately, a healthcare overhaul with new mandates, an energy tax that will drive up input costs and a massive tax code full of quirks and loopholes add to their doubts.

Congressmen are used to having their words taken out of context. They’re even used to having words put in their mouths. Both of those things happened to me after I spoke at the Brookings Institution earlier this month about America’s enormous fiscal challenge — and while my feelings aren’t hurt, the way my words were reported helps illustrate how difficult that challenge is, and why it’s so politically easy to ignore.

If you have followed the discussion surrounding tax reform over the past year, you are familiar with a favorite talking point of those seeking to raise taxes in the name of fairness: American companies need to pay their fair share.