TaxVox proudly presents its 2012 Lump of Coal awards, Thelma and Louise edition, for the worst fiscal policy ideas of the year. The winners are: 10. California. The Golden State probably deserves a lifetime achievement Lump of Coal Award for its inability to balance its budgets, its government-by-initiative, and its endless bouts of fiscal wishful thinking. What, that bump in capital gains tax revenue won’t go on forever? 9. President Obama for proposing to pay for major corporate tax reform by eliminating a handful of minor tax preferences, including subsides for the purchase of corporate jets. Nothing wrong with corporate reform or with ditching the airplane subsidy. The problem is Obama had already pledged to use the same tax break to help reduce the deficit. Physics question: Can a jet flying at the speed of light pay for two things at once? 8. Congress’ decades-long inability to require online retailers to collect sales taxes, just as their bricks-and-mortar competitors must. C’mon gang, even Amazon says it will start collecting sales taxes for online sales. Maybe lawmakers are waiting for free shipping. 7. The Tea Party. What do you call a political movement that flames out after one election cycle? Not only did many of their high-profile candidates lose in November, the loosely affiliated tea party groups have been remarkably silent on what should be their signature issue--the fiscal cliff and long-term deficit reduction. The tea party remains a force in some state legislatures, but its influence in Washington is rapidly fading. 6. The American public. We demand politicians “do something” about the budget deficit—without touching Medicare, Social Security, defense spending, or taxes (except those paid by people making more than us). Yes, we do get the government we deserve. 5. The House Republicans’ Small Business Tax Cut Act. When sensible, the GOP says it favors permanent tax policy that keeps government out of the business of business. So why on earth did the House GOP back a bill that would let pass-through firms with fewer than 500 employees deduct 20 percent of their income from federal tax for one year?  Not only would the tax cut be temporary, but it encourages firms to game the system. And it favors one form of business organization (partnerships and other pass-throughs) over another (corporations). 4. President Obama for a campaign almost entirely devoid of serious tax proposals. When it came to fiscal policy, Obama’s re-election could have been orchestrated by Jerry Seinfeld. It was about nothing. 3. Mitt Romney for his math. Sorry governor, but you really can’t cut individual rates by 20 percent across the board, repeal the estate tax and the Alternative Minimum Tax, repeal the tax hikes in the 2010 health law, and keep the tax code as progressive as it is today—all without adding to the deficit.  Oh, and it would have been good if you could have named just one tax subsidy you’d eliminate. 2. Lawmakers of both parties who continue to insist they can pay for rate cuts and deficit reduction by “closing loopholes.”  This is the tax equivalent of saying you can balance the budget by reducing waste, fraud, and abuse. The deductions for mortgage interest, charitable giving, and state and local taxes are intentional subsidies. They are not accidental loopholes. 1. And the winner (of course) is the fiscal cliff. Congress and Obama created an artificial crisis for themselves, spent 18 months arguing and, so far at least, have accomplished nothing at all. Increasingly, policymakers are like that aunt and uncle who regularly ruin holiday dinners with their bickering. At first, we wanted to reach out and help them. Now we just wish they’d go away. Despite it all, best wishes for a happy holiday and a good new year.