President Biden has a bad habit of deflecting blame and shifting responsibility, something which may come back to haunt his party in November.
“The buck stops here.” This adage, meant to claim ultimate responsibility and declaim ‘passing the buck’, was a fixture of the Harry Truman White House. The President had it emblazoned on a desk sign, putting himself squarely on the top of the decision-making hierarchy and thus taking credit – and blame – for the state of nation at home and abroad. This attitude has been a model for the office ever since, for good and ill. It has (less often than I would like) led to Presidents taking responsibility for the bad choices of their administrations, but it has also helped along a massive expansion of the power of the President to make decrees from the Oval Office. When the two sides of the coin – making executive decisions and claiming responsibility for them – are both present, things can be balanced. When that coin is weighted heavily in the direction of making choices but denying responsibility for them, political disaster tends to ensue. In bad times for the country, that faulty balance becomes even more noticeable, as rhetoric and reality clash. In the current administration, this issue is not just noticeable, but is a siren blaring at full volume.
As you may know, the Republican leadership along with the Trump administration have recently put out the general outlines of their planned tax reform package, which will focus on lowering rates for businesses and individuals, as well as incentivizing business growth and investment through a number of different mechanics, including ‘loophole’ reduction and alteration of some tax treatments. I will have far more to say with respect to this plan as it moves through Congress, but this article is only focused on one specific proposal within the basic GOP plan that is not getting a lot of coverage outside of the business-oriented press (and not even much there). The proposal is known as ‘full expensing’ and allows businesses to treat investments in physical property, intellectual property, and other long-lived assets as expenses that only last one year versus the current treatment which maintains that those expenses must be spread out over multiple years (this is known as ‘depreciation’). Why focus on this seemingly minor proposed change, when there are big rate changes and other important proposals within the plan? As a former auditor and licensed CPA with plenty of experience in reviewing financial statements of large public companies, as well as smaller private firms, I see this proposal, said to boost growth by its backers in the Republican party, as one that will throw the accounting system and financial statements into a world of chaos.Read More »