Tax Reform: "Don't tax you, don't tax me, tax that fellow behind the tree!"

by Jeanne Milliken Bonds

In October 1986, just shy of my 24th birthday, I was sleeping in the Hall of States in the US Capitol using my big ole bag phone as a pillow (yes, a Bag cell phone with each minute costing 2 bucks). I was working on the Tax Reform Act of 1986. It is the only and last real bipartisan effort at tax reform I remember, at the state or federal level.

There was a cast of characters from both sides of the aisle. Ronald Reagan was President, Tip O'Neill was Speaker and the agents of change were Bob Packwood (R), Chair of Senate Finance, and Dan Rostenkowski (D), Chair of House Ways and Means. Other powerful characters in the drama included James Baker, Secretary of Treasury, and Dick Darman, the Deputy Secretary of Treasury who was heavily involved as the tax code "guru." My small business clients pulled in Jimmy Stewart for the ad campaign and it was very effective.

Truly a cast of characters. Another character stood tall in the debate, Senator Russell Long had been Chairman of Finance for 15 years, was a US tax code expert and politician extraordinaire famous for saying, "Don't tax you, don't tax me, tax that fellow behind the tree!" as recounted by Robert Mann in his biography of Long. Long's tax debates and remarks were as famous as his Louisiana quirks.

Looking back fondly on those days, several factors figured large in the tax policy debate. There was, at the time, a strong sense of cooperation derived from a motive of everyone winning politically. There was a political civility in Washington. Both political parties had a watchful eye on basic fairness for people and business. There was a desire for cooperation in a divided Washington. And in the players, there was a real intellectual quest for a better tax code. The cast of characters were smart and savvy, and very often entertaining. At the end of the day, these leaders knew the tax code inside and out, could recall intricate details, could calculate effects at a moments notice. And they all loved the art of politics (with a little "p"), appreciating the art of the theater and the kabuki dance.  And these leaders were relentless, devoting hours and hours to analyzing the tax code.

The reason I toted a bag phone in the day was because the lines for the pay phones (yep, they were there) in the House Longworth Building were very long, filled with lobbyists representing every possible special interest. Remarkably, the lawmakers and Administration spent hours and hours with those representing the special interests, both in open meetings and special meetings, listening and learning. Weekends, weeknights. It was a collective obsession to achieve a solution.

Fast forward to NC in 2012 and Republican supermajorities in the NC House and Senate and a new Republican Governor-elect. I watch with interest as the news outlets report that tax reform in NC is a priority. I have heard that before in NC. Should be a no-brainer, right? After all, the new leadership all sings from the same hymnal and sits on the same side of the Church aisle (borrowed from Chief Justice Burley Mitchell).

But I wonder ... I don't hear the message that we need tax reform for fairness; I don't hear the message that we need cooperation of ideologies for the betterment of our State; I don't hear the message that tax reform is a "political win" that will inspire the State. And, I am not sure I see the active devotion to the technical intricacies by the leaders.

The "will of the people" can be an entertaining concept. Especially when it involves the paying of taxes. The lobbyists will come, the loopholes will be uncovered and maybe even unraveled and re-raveled but the Republicans need a message, more so with their absolute majorities, for all North Carolinians about why and why now.  They need a compelling reason that solidifies their electoral gains. The politics of 1986 was a fascinating exercise by a group of politicians with love of the game. In the end they accomplished a major reform. Time will tell if NC leaders can achieve the same.

Jeanne Milliken Bonds is a political analyst and an NC SPIN Panelist.