I admit it. I’m rooting for the president to take a step so contemptuous of our system of government that it may jolt ordinary voters and even the media from their constitutional stupor. I’m speaking of the potential for President Obama to unilaterally change the tax code.
The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills, seeking to stanch a recent wave of so-called corporate inversions, Treasury Secretary Jacob J. Lew said on Tuesday. . . .
It would be the latest move by the Obama administration to sidestep congressional gridlock and move on a top domestic priority. The president included a provision in his budget proposal this year that would have effectively banned inversions, and Democratic lawmakers have introduced legislation to halt or suspend them. Still, while some Republicans say they want to address the issue, there has been little bipartisan agreement about how to do so.
While Mr. Lew said he believed legislation was the “best solution” for addressing the issue, the recent flood of inversions has persuaded Mr. Obama’s team that quicker action may be necessary.
“If we have to wait for what is the likely period of time before business tax reform can be enacted,” he said, “I think we’re all going to regret the number of inversions that have occurred in the interim.”
Lew even brags that by floating this stunt he is already intimidating businesses. (“Merely by signaling the possible action, Mr. Lew seemed to be working to influence companies that might be considering an inversion to reconsider.”)
There are lots of reasons for quietly rooting for Obama to try this move.
First, the power to levy taxes is so clearly within the purview of the legislative process that it is a wonderfully “clean” issue. Article 1, Section 7 reads: “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.” Even better is Article 1, Section 8: “The congress shall have the power to lay and collect taxes. . . ” Article 2, which defines the powers of the president, does not contain the word “tax.”
Second, there can be no better example of executive overreach than to seize the power to tax from the people’s elected representatives. Come to think of it, we fought a war over that.
Third, there would be discrete victims of his unilateral tax measure who would absolutely have standing to sue if their tax break under existing law is disallowed by the rogue Internal Revenue Service. (Abolishing the IRS is going to become a mainstream position if Obama tries this.) Moreover, they will be well-funded litigants able to take on the issue.
Fourth, hey, if he gets away with it then President Christie or President Rubio can unilaterally lower taxes without Congress. Sure, the public may get whiplash from the back-and-forth between lawless presidents but the Democrats could hardly complain if a GOP president, by executive discretion, sought not to collect and enforce a range of tax provisions, right?
Fifth, this raises the specter of a president who can raise not just big corporations’ taxes but everyone’s taxes, basically whenever he wants. Is there any better argument for huge GOP majorities in both Houses to legislatively undo this and then override a veto?
Sixth, it puts other Democrats, including the presidential contenders, in the position of either disavowing and condemning the practice or agreeing — and taking the blunt of the public’s wrath.
Now, it’s certainly possible Lew is bluffing and/or the president would not risk such a move. But that he should be considering it even casually speaks volumes about this president’s outrageous disregard for the law. And to the extent this is Lew freelancing, simply acting like a political hack and trying to scare taxpayers rather than faithfully performing his job as treasury secretary, it is yet more evidence of the shoddy quality of advisers Obama has chosen for his second term. (It’s also possible he is trying desperately to goad the GOP into impeaching him since his phony spin is not yet convincing even the media that the GOP will try it.)
So, in that spirit, I say go for it Mr. President. Make our day.