What revenue won't do

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It is clear for the moment that any scrutiny of the U.S. tax code is going to be held up against the next national election and the U.S. budget woes.

Ringing in the latest headlines is a study by the Institute for Policy Studies that shows at least 25 U.S. corporations are paying their chief executive officers more than they pay in federal taxes.

That would be understandable, of course, if these corporations were losing money, but they are not. The average profits for the companies in question is $1.9 billion, The New York Times reported Wednesday.

The instant play for that is fairly obvious, of course. Democrats will have a field day with the study that says corporations are not paying their fair share and a small piece of $1.9 billion sounds like a good deal to anyone. Unfortunately, it is not.

Whether or not the taxes are fair is simply beside the point from an economic point of view. From a fiscal point of view, yes: Revenue certainly counts for something and the trillions of dollars lost from the George W. Bush tax cuts are not to be overlooked. But when does fixing the tax code make a monthly $40 billion trade deficit any better? It doesn't.

Here's what a better fairer tax system does not do: It does not create customers for Midwest manufacturers. It does not provide jobs. It does not straighten out the housing market mess. It does not lower escalating healthcare costs. It does not reduce U.S. dependence on foreign oil. It does not, in the words of comedian Ron White, "fix stupid."

A fairer tax code, properly enforced, would do wonders for the U.S. budget, but not if politicians took to salivating all over the new revenue. Fixing the tax code without spending discipline … what would be the point?

Does this make the rhetoric over taxes that is bound to heat up over the next 15 months a big distraction? Not at all. But, predictably, the rhetoric police are going to be busy this year, as the snake oil salesmen will be out in force.

In international markets Wednesday, the Nikkei 225 index in Japan was flat, rising 0.01 percent. The Shanghai composite index in China, also flat, rose 0.03 percent.

The Hang Seng index in Hong Kong added 1.64 percent, while the Sensex in India gained 1.59 percent.

In Australia, the S&P/ASX 200 index rose 0.64 percent.

In midday trading in Europe, the FTSE 100 index rose 1.44 percent, while the DAX 30 in Germany added 2 percent. The CAC 40 in France rose 2.14 percent, while the Stoxx Europe 600 gained 2.07 percent.