Anyone listening to politicians, policy makers and economists talk about the U.S. economy could be forgiven for thinking “uncertainty” is the problem hobbling our nation.

Life is uncertain. Get over it.

In its current usage -- when the Federal Reserve talks about “uncertainty” surrounding the economic outlook -- uncertainty is a euphemism for “things don’t look so good.” Uncertainty as a challenge to forecasters seems to vanish in good times, even though it’s no less prevalent.

Similarly, invoking uncertainty over government policies is often a nice way of saying the policies themselves stink, according to a June 14 Wall Street Journal op-ed by Cliff Asness, managing and founding principal of AQR Capital, a Greenwich, Connecticut, hedge fund.

Now that we’ve gotten our terms straight, let’s move on to tax uncertainty, which, for Republicans, ranks high on the list of unknowns. If only tax rates were lower, they say, all that uncertainty preventing businesses from investing and hiring would vanish and the economy would heal itself.

Don’t get me wrong: I prefer lower taxes to higher ones. Still, I’m flummoxed by the notion that lower tax rates on both businesses and households will provide that certain something -- call it certainty? -- the economy lacks.

Tax policy set by one Congress has a life span of no more than two years, which is the interval between elections for the House of Representatives. That’s not a particularly long time horizon for someone looking to start a business or a big company contemplating a long-term investment.

Born for Uncertainty

“Entrepreneurs thrive in a world of uncertainty,” says Robert Litan, vice president of research and policy at the Kauffman Foundation in Kansas City, Missouri. “They want to reinvent the status quo.”

Unlike big business, “entrepreneurs don’t worry about demand in the abstract,” Litan says. (Keynesians take note.) In fact, the entrepreneur’s job is to make you want things you didn’t think you wanted.

More than half the Fortune 500 companies were started during a recession or bear market, a 2009 Kauffman study found. Entrepreneurs, if they’re successful, realize their gains through appreciation of their stock price rather than through earned income.

This isn’t to say that tax rates don’t matter. They do.

“Taxes tell you what not to do,” says economist Arthur Laffer, chairman of Laffer Associates, whose eponymous curve describes the relationship between tax rates and government revenue.

Tax Disincentives

For example, when U.S.-based multinational companies repatriate profits earned overseas, those profits are taxed again by the U.S., less a credit for taxes paid to the foreign country of operation. That’s a big disincentive to bring those profits home. In general, if you tax something more, you get less of it, be it products sold, labor provided or profits repatriated.

If you want to make a case that tax uncertainty is affecting the U.S. economy, using the word in its proper sense, look no further than the 72,536 pages of federal tax code rules, regulations and Internal Revenue Service rulings. The tax code is an exercise in whimsy for politicians, allowing them to reward favored constituencies (read: potential campaign donors) with special exemptions and loopholes.

There’s a reason General Electric Co. has a 975-person tax department, whose job it is to minimize the company’s tax liability. Chief Executive Jeffrey Immelt, who serves as chairman of President Barack Obama’s Council on Jobs and Competitiveness, can tell his boss our convoluted tax code “created or saved” 975 jobs, but we’d all be better off if those lawyers and accountants were using their time productively rather than figuring out, as Laffer says, what not to do to avoid paying taxes.

Find That Rate

The solution, of course, is “the lowest rate on the broadest base with the least incentive to avoid, evade or not report taxable income,” Laffer says.

And once we find that illusive rate, let’s leave it there. Walk away. Forget about it. Tax policy, almost all experts agree, should be designed to raise revenue for necessary government programs as simply and as fairly as possible while minimizing economic inefficiency.

As things stand, tax policy is informed by special interests and implemented by lawmakers in the service of those interests. What’s good for one isn’t good for all, which is why tax uniformity should be the goal.

Eye of Beholder

President Obama and some GOP lawmakers have talked about eliminating tax expenditures, those exemptions and deductions that amount to about $1 trillion a year. No one has yet to fashion a deficit-reduction proposal based on it, much less a piece of legislation.

Even the president’s National Commission on Fiscal Responsibility and Reform stopped short of advocating the elimination of tax expenditures, which it calls “backdoor spending.” Instead the panel recommended reducing their size and number. (The lobbyist with the biggest purse gets to keep his tax break.)

The Grover Norquist anti-tax wing of the GOP claims that eliminating tax expenditures constitutes a tax increase. That’s silly. A tax break for one party, without a revenue offset, implies bigger deficits. Tax expenditures are government spending by another name -- and smell just as bad.

What’s more, the projected $1 trillion in annual savings from abolishing tax breaks would allow for a reduction in tax rates on corporations and households.

Limit Limited Powers

Achieving true tax-policy certainty would entail repealing the 16th Amendment to the Constitution, which gives Congress the power to tax “incomes, from whatever source derived,” and replacing it with a national retail sales tax. Alternatively, Congress could amend the Constitution and restrict its taxing power, one of its 18 powers enumerated in Article 1, Section 8, so that the tax rates, credits and exemptions it enacts apply to all taxpayers.

How likely is that? This is one of the few times I can say, with absolute certainty, it’s not going to happen.

(Caroline Baum, author of “Just What I Said,” is a Bloomberg View columnist. The opinions expressed are her own.)

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To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.

To contact the editor responsible for this column: Mary Duenwald mduenwald@bloomberg.net