Abstract

DURING the 1972 presidential campaign, federal income tax reform came unexpectedly to the foreground as a political issue in the Democratic primaries and promised for a few weeks to play an important role in the election itself. It was soon elbowed aside by the prospect of peace in Viet Nam, charges of political espionage and corruption, and attacks on the personal attributes of the two candidates, but for a short time it actually succeeded in crowding school bussing off the front pages. To the cynic, this might in retrospect seem to be the principal accomplishment, if not the purpose, of the vivid charges that the Internal Revenue Code is riddled with loopholes and that millionaires sometimes pay less in taxes than bluecollar workers. I am inclined, rather, to believe that these grievances continued to smoulder below the surface, like the issue of school bussing, even after President Nixon and Senator McGovern turned their attention to other questions. Moreover, just as hostility to school bussing emanated from a variety of sources, so the assault on tax loopholes brought together some strange bedfellows. Advocates of a New Populism wanted to close loopholes in order to strengthen the income tax as a tool of income redistribution. Academic experts, who supplied most of the intellectual ammunition for the tax reform movement, wanted to purge the income tax of its imperfections primarily to insure horizontal equity; for most of them, increased progressivity was only a secondary objective, and some were prepared to accept, or even to advocate, a less progressive rate structure if that was the legislative cost of tax reform. Welfare reformers who wanted to replace today's welfare system with a guaranteed-income program thought that their proposals could be financed by closing tax loopholes. For still others, tax loopholes were only symptoms of a worse disease-a federal bureaucracy serving the interests of the very rich and the very poor but financed by those in between. Their remedy was to cut back

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