Osama Bin Laden and Taxes
How Osama Bin Laden dead may affect taxes
The initial reaction to these headlines is easy to guess. What, no? What is the connection between Osama Bin Laden, his death, and taxes, really? Oh come on, seriously, this is just another blatant attempt to surf the news, isn’t it?
Well, without venturing too deeply into chaos theory, with its butterfly wings flapping there and tornadoes starting here – indeed can we legitimately apply the so-called butterfly effect, which presupposes a “small” change producing “large” differences in outcome, to an event as momentous as the September 11th attack to which Bin Laden is tied, his death being, in the end, a mere footnote to the monumental event? – it is still valid to ponder the string of possible consequences which the demise of the Al Qaeda leader, and the relative closure his death brings to the events of 9/11, may have for our economy and taxes.
From the outset, in the wake of the killing of bin Laden, some have already started to speak of an Osama stimulus. According to their jerry-built theorem, the elimination of America’s most infamous enemy, in large part by bookending the decade that began on September 2011, has produced a wave of such optimism that it will quickly engulf all of us in an orgy of spending and hiring that will surely prop up all the sundry boats that make up the nation.
A less fanciful corollary of Bin Laden’s death is the 11% upswing it quickly brought to President Obama’s popularity with 52-57% of the public, including both republicans and independents, now approving of the president’s job performance. Were this increase to be sustained – a gargantuan if given the vagaries of the news cycle – enabling Mr. Obama to win re-election in 2012, can we doubt that Osama bin Laden’s death will have had at least an indirect effect on taxation? For one, the executive branch and the veto pen will remain in Democratic hands, irrespective of changes in house or senate, with clear repercussions on tax policy.
But beyond this, in the debate that daily grows since his death among talking heads on Osama’s legacy, specifically as regards his success or lack thereof in attaining his aims, there is much that relates in subtle but clear ways to issues of taxation. Bin Laden’s avowed ambition in the wake of the September 11th attack, his master plan if you will, was to cause the United States to “incur great long term economic burdens” leading to “further economic collapse” through “overreach”, notably in the fight against global terrorism. He may well have failed in his ultimate goal, the restoration of the seventh century Caliphate, including the retaking of Spanish Andalusia lost to the Reconquista, but the budding consensus is that, by compelling the US to enter into two costly, ongoing conflicts in the Middle East, he may well have succeeded in at least part of his aims.
This of course leads us back inexorably to issues of taxation, because an exit from the economic morass of our Great Recession must ultimately pass through tax policy. This is true whether it involves, as the right would typically argue, cuts in taxes to further incentivize business and individual productivity or, as the left is more apt to propose, increase in taxes, above all on the wealthy, to combat the expanding deficit and augment the government’s role in the economy for the good.
It is entirely conceivable then as some have suggested that the killing of Osama Bin Laden, this nation’s most personified threat, is little more than a “brief respite” from the “looming political clash over the rising debt” and how to manage it, which is to say a debate, by extension, over taxation and the role of government. This is a political quarrel that shows as yet little sign of being resolved. Osama’s death may well turn out to have been a flash in the pan while the effects of his strategy, the dark masterwork initiated by the attacks of September 11th, linger and compel the President to once again turn his attention to the economy. For the foreseeable future, Obama and Osama seem destined to remain tied at the hip by more than the shared letters of their names.