Tough Politics Are the Barriers to Tax Simplification

As we head toward the November elections, the debate over tax reform is intensifying. The simple truth is that the tax code has become riddled with ineffective social policy objectives and narrow, distortionary economic agendas. But two challenges face lawmakers seeking to rid the tax code of political favoritism and return it to its core function of raising sufficient revenue to cover the government’s obligations. First, there are the politically powerful forces bent on protecting various tax credits and preferences even if they are detrimental to the economy. Second but equally important are the complex economic questions involved in deciding which tax preferences are most harmful and which are actually helpful and appropriate.