President’s Letter

Dear Fellow NABE Members,

I’m normally a pretty calm person.  Descended from northern Europeans, my idea of conflict resolution is a long cooling-off period; my Italian wife prefers five minutes of high-decibel debate.  Of course, whichever style is applied, I am still wrong.

To remain reserved, I try to avoid situations that test my temper.  I hate being late, and I hate being lost (and I get very perturbed if I am both).  So I set my watches a few minutes ahead, and I invested in a portable GPS monitor to keep me on track. 

But there is one experience that remains exceptionally stressful, with no remedy in sight.  In the latter weeks of January, the mailbox fills with a myriad of year-end tax statements that remind us all that 1040 season is upon us.  I can feel my blood pressure rising just thinking about trying to complete schedule D, which would frustrate Job himself.

The complexity of the tax code and the attendant cost to the economy of compliance are topics we have discussed at past NABE conferences.  Despite widespread agreement that simplification would help, there has been no progress in this direction.

My frustration is not, however, confined to the chore of filing my taxes.  The process tends to focus us all on the amounts we pay to the government; I suspect that most of us think that we pay far too much, especially when our other taxes (state, sales, and property levies among them) are added in.  As economists, we are trained to understand that high rates of taxation can be a disincentive to work and invest, thereby taking away the vitality which drives GDP forward.

Yet as onerous as we may think that our burden is now, it could easily get far worse.  Our annual deficits could grow dramatically as retiring baby boomers place more of a burden on public pension and health systems.  While we have financed our deficits with relative ease to this point, it is never certain that our creditors will continue to support our profligacy.

The need for enlightened fiscal policy is therefore high, and the debate over the proper course has become livelier with the seating of a new Democratic Congress this year.  It is an ideal time to debate our alternatives.

This coming March 12 and 13, NABE will be conducting its Annual Policy Conference in Washington.  Along with coverage of monetary and trade policy, a good portion of our agenda will address issues related to the federal budget. 

Among the sessions on the program are:

• Alternatives for Fiscal Policy
• Options for Medicaid Reform
• Democratic Tax Policy: Increases, Cuts, or Major Reform?

We’ve attracted speakers from the Congressional Budget Office, the Department of the Treasury, and a number of policy institutes to enrich our discussions.  John Silvia, chairman of the conference, has done an outstanding job of putting together the agenda.  We very much hope that you can join us for this very worthwhile event.

I know that some of you will read this missive and wonder why I don’t avoid the aggravation and hire an accountant to handle our taxes.  The adage about those serving as their own lawyers having fools as clients may apply in this area, too.

That day may come, but I have always wanted to stay reasonably close to our finances.  As a nation, we are entering an era where we should pay especially close attention to our public finances.  Through our conferences and writings, NABE will do its part to further this process, and hopefully contribute positively to the public debate in this area.

C. R. T.
Carl Tannenbaum
NABE President