Paul O'Neill Against the Tax Code

Back in December, when George W. Bush was rumored to be looking for a new Treasury Secretary, Paul O'Neill was asked on television what he thought about the prospect of getting kicked out of Washington.

"Hallelujah!" O'Neill replied. Later, when the New York Post report that had started the rumor mill proved baseless (the White House reportedly traced it to the PR rep of the guy named in the story as O'Neill's likeliest successor) O'Neill's spokespeople insisted he'd been kidding. But the comment fit the man. In a year on the job, O'Neill has been everything his revered predecessor Robert Rubin was not — an industrialist openly derisive of Wall Street histrionics, a line-item number-cruncher with no appetite for complexity, a cranky straight-shooter uncomfortable with Washington politicking — and easy to dismiss because of it.

But now — hope against hope — O'Neill may just have the job he was born to do: Clean up the tax code.

"In the coming weeks, we at Treasury will be producing a series of reports on the complexities of the tax code for individuals, small businesses and for corporations," he told a Chamber of Commerce audience Thursday. And the gist of those reports is pretty obvious. "Our tax code is an abomination," O'Neill said. "Everyone who has anything to do with the tax code agrees it is just an unbelievable mess."

The Treasury Secretary made no mention of Enron — apparently in keeping with an administration rule — focusing instead on non-topical "absurdities" like the five major definitions of a child in the tax law, and how efforts wasted on compliance (or defiance) are "strangling our prosperity." But O'Neill must know that with Washington in a tizzy about campaign finance, corporate welfare and the question of which administration sold its soul to Ken Lay first, this is as apt a moment as he's likely to see for simplification crusade — if he sells it right.

Want to keep the money out of politics? Take the politics out of money. The thicket of bendable laws, targeted tax breaks and yes, dime-a-dozen "absurdities" are what keeps the campaign checks in the mail and the lobbyists in the corridors of power. When one tweak in one bit of fine print can save a corporation millions, how can we expect them to stop trying to secure that advantage — or expect politicians with elections to fund to stop listening? Seems the smart thing to do would be to cut back on the little favors politicians can do by taking the little favors out of the equation entirely.

Of course, O'Neill is up against just about everybody in this fight: The accountants and lawyers for whom tax-law complexity creates a very lucrative career; the lawmakers whose own power derives in part from the complexity of the tax code; even the White House, which despite its stated disdain for government "picking and choosing" has put more than a few targeted tax breaks into its proposed new budget. Since Congress last took a serious whack at this sort of thing in 1986, dozens of hearings — not to mention Al Gore's "reinventing government" initiative — haven't made a dent. Instead, they've made it worse.

A vastly simpler tax code would not only mean fewer headaches for Joe Public come April — and a smaller enforcement budget for the currently-underfunded IRS — it would get government out of the very un-democratic, un-capitalistic business of deciding who deserves a little something extra and who doesn't. Level the playing field, clean up the government, allow ordinary citizens to occasionally comprehend the government they have a hard time trusting these days — what, exactly, is the downside? But until Bush takes some time off from the war to throw some oratory weight behind the loneliest member of his cabinet, the only thing on O'Neill's side is common sense.

And he'd be the first to admit how far that gets you in Washington.