Tax Reform: Up from the Ashes

Abstract

To great fanfare, tax reform passed the House of Representatives late last year. It moved on to the Senate amidst uncertain signs from the heavens. The Senate is in the hands of the president's party; the president wants tax reform and, as the most effective Republican campaigner in a crucial election year, he has considerable leverage. But the president himself threatened that he would veto the House bill if it reached his desk unchangedhardly an auspicious proclamation. And the Senate is a dubious way station for tax reform, with that body's close ties to so many special interests drawn ever tighter by escalating campaign costs. Any tax reform bill must be a finely balanced instrument. It must weigh the agendas of powerful interests against the burdens of poor and middle-class households and the revenue needs of the federal government. It must win political support for quantum change from groups who find security, and sometimes comfort, in the status quo. In this need for balance is tax reform's greatest vulnerability; it can be destroyed directly, or through a series of seemingly minor amendments that reduce its revenue potential or impose excessively on