In 1986, Democrats and Republicans came together and enacted a tax reform measure that closed loopholes and lowered tax rates. That was a great achievement. The â??86 act has shaped thinking ever since. Now when people talk about tax reform, they instinctively say, â??Letâ??s do another â??86-style act.â? When they debate tax ideas, they inevitably fixate on the two levers that were central back then: closing loopholes and changing top marginal rates.
The problem is that itâ??s not 1986 anymore.
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