Congress is long overdue for serious effort at tax reform
By Ezra Klein
Washington Post Staff Writer
Sunday, March 14, 2010
Congress is ready for a nap. The financial crisis was a year-long emergency. Health-care reform has been a seemingly endless grind. No one quite knows what to do about jobs. Cap-and-trade seems doomed in the Senate, which means all the work the House did to pass its bill was for nothing. The election looms. There's not a lot of enthusiasm for taking on another big, complicated issue that will be distorted by interest groups and screamed about on cable networks and ripped apart on op-ed pages.
But there is some. A lot of it is coming out of Sen. Ron Wyden's office. Wyden (D-Ore.) -- last seen pushing a bipartisan, comprehensive health-care reform bill that would have passed in a landslide if pundits and experts had votes in the Senate -- is Congress's Energizer Bunny when it comes to proposing ambitious policy overhauls. His next target is tax reform.
As well it should be. There aren't many free lunches left in Washington. But from a policy, if not a political, standpoint, tax reform is one of them. Economists of all stripes agree that the tax code has become so complex and inefficient that we're raising less money than we could with a simpler tax code that offered lower rates. Think about that: We could cut taxes for most Americans while keeping revenue steady.
The problem, of course, is that not everyone agrees those breaks and loopholes and deductions and exemptions and deferrals and exclusions are bad. Save for a couple of big-ticket tax items -- the mortgage interest deduction, for example -- the politics for most of the sections you'd want to clean from the tax code pit a tiny group of beneficiaries who are committed to preserving their sweetheart deals against the vast majority of Americans who have no idea that the tax code contains that deal in the first place. "Every interest group around will be lined up saying if you take our tax break, Western civilization will end," Wyden predicts.
(More here.)
Washington Post Staff Writer
Sunday, March 14, 2010
Congress is ready for a nap. The financial crisis was a year-long emergency. Health-care reform has been a seemingly endless grind. No one quite knows what to do about jobs. Cap-and-trade seems doomed in the Senate, which means all the work the House did to pass its bill was for nothing. The election looms. There's not a lot of enthusiasm for taking on another big, complicated issue that will be distorted by interest groups and screamed about on cable networks and ripped apart on op-ed pages.
But there is some. A lot of it is coming out of Sen. Ron Wyden's office. Wyden (D-Ore.) -- last seen pushing a bipartisan, comprehensive health-care reform bill that would have passed in a landslide if pundits and experts had votes in the Senate -- is Congress's Energizer Bunny when it comes to proposing ambitious policy overhauls. His next target is tax reform.
As well it should be. There aren't many free lunches left in Washington. But from a policy, if not a political, standpoint, tax reform is one of them. Economists of all stripes agree that the tax code has become so complex and inefficient that we're raising less money than we could with a simpler tax code that offered lower rates. Think about that: We could cut taxes for most Americans while keeping revenue steady.
The problem, of course, is that not everyone agrees those breaks and loopholes and deductions and exemptions and deferrals and exclusions are bad. Save for a couple of big-ticket tax items -- the mortgage interest deduction, for example -- the politics for most of the sections you'd want to clean from the tax code pit a tiny group of beneficiaries who are committed to preserving their sweetheart deals against the vast majority of Americans who have no idea that the tax code contains that deal in the first place. "Every interest group around will be lined up saying if you take our tax break, Western civilization will end," Wyden predicts.
(More here.)
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