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Joseph J. Thorndike

Director of the Tax History Project and Contributing Editor


All Posts by Joseph J. Thorndike

May 26, 2016 - 5:52 AM EDT
Reagan Wanted His Taxes Private -- Just Like Trump
Donald Trump likes to compare himself to Ronald Reagan, especially when trying to explain how a former Democrat finds himself at the top of the GOP ticket. But Reagan and Trump have something else in common, too: The Gipper, just like The Donald, wanted to keep his tax returns private. Trump should... [Read More]
May 12, 2016 - 11:35 AM EDT
Why Should Trump Get Special Treatment for His Tax Returns?
Donald Trump has now reneged on his promise to release his personal tax returns. That should come as no surprise, given The Donald's difficulty in keeping his story (and his excuses) straight. But in saying that he expects to disclose no tax returns before the November election, Trump is set to be... [Read More]
April 29, 2016 - 10:44 AM EDT
The Only Thing Certain in Life Is Death —Taxes, Not So Much
Since 1960, Congress has enacted 66 major tax laws. At more than one major law per year, that makes for a pretty good clip – and a lot of uncertainty. But it's still a conservative measure of changes to the tax system. If we include the numerous laws that modify taxes in more incidental fashion, w... [Read More]
April 4, 2016 - 12:40 PM EDT
Donald Trump Won’t Release His Tax Returns While Under Audit. But Richard Nixon Did.
Which of these things is not like the others: Donald Trump, Hillary Clinton, Bernie Sanders, Ted Cruz, and John Kasich? If you guessed Clinton, you're right. She's the only presidential candidate to actually release complete copies of her personal income tax returns. She may have a reputation fo... [Read More]
March 24, 2016 - 3:09 PM EDT
Face It: Americans Just Don’t Like the Estate Tax
I'm of two minds about the estate tax. One the one hand, I think liberals should double down in defense of this, the most progressive of federal taxes. If the left can't win this fight, in this environment — rising inequality, stagnant wages, populist politics — they might as well close up shop... [Read More]
February 26, 2016 - 11:55 AM EST
Forget the Audit: Trump Should Release His Tax Returns Today
Donald Trump has finally explained – sort of – why he's been so evasive about releasing his tax returns. Apparently, he's being audited. But in fact, that's no explanation at all: Trump is still free to release his returns, and he should do it today. There are plenty of good reasons why taxpay... [Read More]
February 8, 2016 - 8:05 PM EST
Bernie Sanders Wants to Soak the Poor — Just Like FDR
If Bernie Sanders wins the New Hampshire primary, it'll be the best thing to happen to American socialism since Eugene Debs placed fourth in the 1912 presidential election. Indeed, Sanders has called Debs “the greatest leader in the history of the American working class.” But when it comes to po... [Read More]
January 21, 2016 - 12:43 PM EST
Do Progressives Hate Tax Reform?
Everyone likes tax reform. Except liberals, of course. And conservatives, too. “The traditional approach to tax reform is to make the tax code fairer and more respectful of taxpayer economic values,” intoned GOP luminary Douglas Holtz-Eakin in a recent piece for The Huffington Post.“Progressives... [Read More]
December 14, 2015 - 3:59 PM EST
How Profit Sharing Sent Captain Ahab in Search of Moby Dick
When Captain Ahab set sail, he was looking for revenge. But the crew of the Pequod were after something less personal and more profitable: sperm whales. And thanks to an 18th-century form of profit sharing, they were motivated to find them. “The method of wage payment in the whaling industry was a... [Read More]
November 24, 2015 - 7:54 AM EST
Tax Credits Are Easy – And a Loser’s Game for Liberals
Hilary Clinton's presidential campaign is still churning out tax proposals at a furious pace. Over the weekend, she proposed a new credit for caretakers—intended, according to her campaign, to “provide support for the millions of families paying for, coordinating, or providing care for aging or... [Read More]
October 22, 2015 - 3:52 PM EDT
Mexico Is Having Second Thoughts About the Soda Tax – And So Should Everyone Else
For fans of taxing soda, Mexico is the object lesson. Last year, the country imposed a stiff new tax on sugary drinks. And according to the early data, it's working: The 10 percent tax seems to have cut soda consumption by about 6 percent. You'd think results like that would embolden Mexican lawm... [Read More]
October 5, 2015 - 3:37 PM EDT
The ‘Cadillac’ Tax Shows Why Obamacare Was Never Built to Last
The “Cadillac” tax – Obamacare's signature albatross – was never a good idea. Sure, it was good policy, as more than 100 economists pointed out last week. But it was always bad politics. And when it comes to building durable social programs, politics matter. There are good reasons to like the... [Read More]
September 10, 2015 - 8:37 AM EDT
Don’t Bother Fixing the Tax Code Unless You Fix the IRS Too
Republican presidential candidate Jeb Bush wants to fix the nation's tax law. Which is great – it needs a lot of work. But so far, Bush doesn't seem very interested in fixing something even more important: the IRS. Because even a good tax law will fail when administered by a bad agency. The IRS... [Read More]
August 27, 2015 - 8:32 AM EDT
When it Comes to Taxes, Americans Are of Two Minds – or Three, or Five or Eight
If foolish consistency is the hobgoblin of little minds, then Americans have very big minds, indeed. While trying to make sense of Donald Trump's statements on tax policy, I was struck by their disparate quality; to call them random is to exaggerate their coherence. But then I realized that Trump... [Read More]
August 13, 2015 - 10:30 AM EDT
The Clintons Don’t Care About Tax Reform – And Neither Does Anyone Else
Hillary Clinton has plans for America – some appealing, some not -- but they all share a common thread. No, it's not “building an economy for tomorrow” or “strengthening America's families.” Rather, it's their tendency to make tax reform a whole lot harder. Consider the “New College Comp... [Read More]
August 6, 2015 - 9:49 AM EDT
Clinton Should Keep It Simple and Just Propose Repealing the Capital Gains Preference
Last month, Hillary Clinton released a not entirely novel plan for taxing capital gains. In an effort to encourage long-term thinking and check the rise of what she calls “quarterly capitalism,” she suggested a tax break targeting buy-and-hold investors. If investors are thinking long-term, corpo... [Read More]
July 28, 2015 - 12:14 PM EDT
Would Private Debt Collectors Do a Better Job Than the IRS? Not Likely
If you're a lawmaker who wants to punish the IRS and you're tired of simply starving it of funding, what's next? How about dismantling one of the agency's core functions and outsourcing it to the private sector? That's what Senate Republicans have proposed (again), this time as part of legisla... [Read More]
June 30, 2015 - 12:01 PM EDT
Jeb Bush Takes a Page From Richard Nixon by Disclosing Personal Tax Returns
Jeb Bush is poised to take the lead in this year's race for most transparent candidate, and will release 33 years of personal tax returns on his campaign website this afternoon. It's a bold move – and a shrewd one. As Richard Nixon discovered 63 years ago, financial disclosure can be embarrassi... [Read More]
June 25, 2015 - 8:57 AM EDT
Rand Paul’s Tax Plan May Be Radical, But It’s Not Impossible
Last week Rand Paul unveiled his plan for the “Fair and Flat Tax.” That makes him the latest – but certainly not the last – presidential candidate to embrace the rhetoric of flatness. If recent experience is any guide, it won't be an easy sell. Just ask Steve Forbes, Newt Gingrich, Rick Perry... [Read More]
June 17, 2015 - 1:35 PM EDT
First They Taxed Soda; Now They’re Coming for Your Water
Last year, voters in Berkeley, California, approved a new tax on sugary drinks. That success has encouraged fans of taxing other “sins,” including your cherished liter of Evian. “There are enormous environmental, social, and ethical costs associated with bottled water,” declared Laura Bliss in... [Read More]
June 9, 2015 - 8:14 AM EDT
Carly Fiorina Answers the $59 M Question: Why Should Candidates Release Their Tax Returns?
Carly Fiorina may be trailing in the race for the Republican presidential nomination, but she's leading the pack when it comes to financial disclosure. Last week, the former Hewlett-Packard CEO released a personal financial disclosure statement, buttressed by two years of tax returns. You can see... [Read More]
May 20, 2015 - 3:32 PM EDT
Republicans Should Embrace the Gas Tax – After All, They Invented It
The Highway Trust Fund is about to run out of money. Again. This manufactured crisis may be Washington's most regular – and predictable – demonstration of failure. If Congress cobbles together another temporary patch, it will be the 33rd in the last six years. 33! Politicians like a little urgen... [Read More]
May 14, 2015 - 9:19 AM EDT
Tax Cuts Are Tax Cuts Even When You Call Them Tax Reform
Is a tax cut still a tax cut if you call it “tax reform”? For my money, the answer is yes. But Howard Gleckman at the Tax Policy Center feels differently. Republican presidential candidates are going soft on big government, he contends. Or at least soft on big revenue. While most of the party's... [Read More]
May 7, 2015 - 11:09 AM EDT
Even Under a Flat Tax, Learn to Love Those Loopholes, Because They’re Here to Stay
The flat tax is back, thanks to a variety of GOP presidential candidates, including Ted Cruz, Ben Carson, and Rand Paul. Their collective enthusiasm has given new life to this old idea. The problem for the flat tax has always been its popularity – or more specifically, the lack thereof. As one of... [Read More]
April 29, 2015 - 1:07 PM EDT
Abolish the IRS? Good Luck With That
For opinion writers, it takes a special sort of gumption to deliberately antagonize your most loyal readers. In that spirit, this week's Profile in Editorial Courage award goes to Patrick Brennan of The National Review, who recently dared to defend the existence of the IRS. Brennan was moved to hi... [Read More]
April 22, 2015 - 1:55 PM EDT
Tax Cuts for the Rich Don’t Create Many Jobs, but What About Tax Hikes?
Want to create some jobs? Then cut some taxes. But make sure you cut them for the right people. According to Owen Zidar, an economist at the University of Chicago Booth School of Business, you'll get the biggest bang for the buck by focusing your tax relief on the poor and middle class. For decade... [Read More]
April 15, 2015 - 1:41 PM EDT
Republicans Want to Repeal the Estate Tax Because Too Much Is Never Enough
It's tax day, so it must be time for another round of showboating on Capitol Hill. The majority party usually takes the lead on these things, so Republicans have decided to mark our national anti-holiday by voting to repeal the estate tax. This year, however, we're getting Repeal 2.0: less defens... [Read More]
April 1, 2015 - 12:35 PM EDT
Ted Cruz and His Dim-Bulb Tax Policy
Sen. Ted Cruz is like a 100-watt light bulb – very bright, but with the dimmer turned way down. By many accounts both brilliant and thoughtful, he seems happiest when channeling the simplistic and shallow. Especially when it comes to taxes. Cruz has been getting attention for his tax views, especi... [Read More]
March 17, 2015 - 11:57 AM EDT
Mike Lee’s Tax Plan Was Promising. Until It Wasn’t.
In 2013 Utah Sen. Mike Lee released a tax plan. It was interesting and very expensive. In 2015 Lee released a new tax plan, this time with help from Florida Sen. Marco Rubio. It was less interesting and much more expensive. Lee's 2013 proposal – hailed as an example of “reformicon” economic thi... [Read More]
March 4, 2015 - 2:50 PM EST
Voters Are Confused About the Difference Between Tax Avoidance and Evasion – Because Politicians Blur the Line
According to a recent poll, voters in the United Kingdom don't see a distinction between tax avoidance and tax evasion, at least not a moral one. According to a YouGov survey, 59 percent considered avoidance “unacceptable,” while only 32 percent thought it was legitimate. The pollsters took pain... [Read More]
February 26, 2015 - 9:33 AM EST
Hey, It Could Happen! The Optimist’s Case for Tax Reform
It's easy to be cynical about tax reform. Politicians tell us that fixing the tax system is imperative and essential. But comprehensive reform is unusual and durable changes rarer still. That's not exactly a recipe for optimism. “For longtime tax observers, it is hard not to have a jaundiced vie... [Read More]
February 10, 2015 - 3:05 PM EST
When It Comes to Tax Reform, History Tells Us What Might Happen – And Why It Probably Won’t
The Senate Finance Committee got a visit from the Ghosts of Politics Past today. Former Sens. Bob Packwood and Bill Bradley answered the call of a desperate committee and tried to conjure up some useful thoughts on “Getting to Yes on Tax Reform.” The past is almost never a good model for the fu... [Read More]
February 3, 2015 - 4:52 PM EST
Obama Abandons the Gas Tax – Just Like Everyone Else
President Obama's 2016 budget includes a predictably bad solution for fixing the nation's infrastructure crisis: a one-time tax on the foreign earnings of U.S. corporations. The idea is predictable because lots of people in Washington have proposed similar solutions to the looming bankruptcy of t... [Read More]
January 29, 2015 - 8:48 AM EST
What Obama’s 529 Flip-Flop Says About Your Roth IRA
Well, that was quick. According to news reports, the White House has abandoned its brand-new proposal to tax withdrawals from 529 college savings plans. Administration officials are now calling the plan a “distraction,” which is a nice way of saying “albatross.” I guess if you're going to cut... [Read More]
January 6, 2015 - 3:46 PM EST
Planned Disasters Are Here to Stay – and Probably the Only Hope for Tax Reform
Congress returns to Washington today, and Republicans have a chance to strut their stuff as the Capitol's new majority party. But the GOP ascendancy raises a question: Can Republicans actually govern without a crisis? Jamelle Bouie asked that question in Slate recently and offered a sobering recol... [Read More]
December 10, 2014 - 1:30 PM EST
Wall Street Journal Prefers Ignorance to Expertise
The Wall Street Journal wants to banish expertise from Capitol Hill – at least when it comes to economic policy. In a defiantly anti-intellectual editorial, the paper suggested recently that Congress abolish both the Congressional Budget Office and the Joint Committee on Taxation. Both are bastion... [Read More]
November 26, 2014 - 7:35 AM EST
The Best Hopeless Idea in Washington
For an idea with plenty of champions, the carbon tax sure has lousy prospects. It is one of those proposals that wonks love to champion but politicians love to hate. Do a quick Web search and you'll find a host of champions for the levy, hailing from both ends of the political spectrum. But look f... [Read More]
November 11, 2014 - 4:44 PM EST
Democrats Getting What They Deserve on Medical Device Tax
Apparently, the medical device tax (MDT) is one of America's biggest problems. Incoming Senate Majority Leader Mitch McConnell, R-Ky., has made its repeal one of his top priorities. Device manufacturers are prepping for a victory celebration after bankrolling a multiyear campaign that seems ready... [Read More]
October 30, 2014 - 9:21 AM EDT
Can Jeb Bush Save Conservatism by Compromising It?
Jeb Bush has a problem, and his name is Grover Norquist. According to Politico, Bush has made some powerful enemies in his own party, especially among antitax purists. His problems derive not from his tenure as Florida's governor, where he championed the requisite round of tax cuts. Rather, they s... [Read More]
October 23, 2014 - 8:37 AM EDT
What if Congress Raised Taxes and Nobody Cared – Or Even Noticed?
Two years ago, Congress raised taxes on almost every working American – and nobody cared. In fact, a lot of people didn't even notice. That tells us something important about the way Americans view taxes. But it also tells us something important about how we collect them. In 2011 and 2012, Congre... [Read More]
October 14, 2014 - 9:10 AM EDT
Forget Privacy -- It's Time to Tax Miles, Not Gas
We ask a lot of the gas tax. We expect it to build new roads, keep our bridges from falling down, and fund a variety of public transit projects. As if that weren't enough, we also want it to clean up the world, discourage fuel consumption, and curb air pollution. All these goals are related, of co... [Read More]
October 2, 2014 - 9:01 AM EDT
Let’s Stop Talking About Tax Reform
Rep. John A. Boehner, R-Ohio, thinks tax reform is “in the realm of doable” over the next two years. That sort of upbeat assessment should be encouraging -- especially coming from the speaker of the House. But it's hard to take Boehner seriously when his GOP colleagues don't. “Tax reform's on... [Read More]
September 18, 2014 - 9:11 AM EDT
Should We Tax Away Huge Fortunes?
Sen. Bernard Sanders wants to rein in the runaway billionaires. In a recent piece for The Huffington Post, the Vermont independent (and apparent presidential candidate) made the case for a progressive estate tax. “Unless we reduce skyrocketing wealth and income inequality,” he declared, “unless... [Read More]
September 11, 2014 - 9:40 AM EDT
The Corporate Income Tax Has Always Been About Power
Corporate inversions are a hot topic these days. Every time another U.S. company announces plans to relocate its headquarters overseas, politicians shake their heads and promise action. But the inversion wave has produced more than earnest intentions and (so far) empty promises. It's also sparked... [Read More]
September 2, 2014 - 7:45 PM EDT
When Do-Gooder Taxes Don’t Do Good
I'm no fan of anti-obesity taxes, whether they target soda, candy bars, or any other junk food. They are regressive and arbitrary, not to mention paternalistic and condescending. Supporters have all sorts of genuine good intentions. But ultimately, these taxes are simply an unfair money grab dress... [Read More]
August 26, 2014 - 7:37 PM EDT
Warren Buffett Is a Tax Avoider. Good for Him.
Burger King is going to have it Tim Hortons' way, and Warren Buffett will be their server today – or at least their financier. The Burger King deal seems to be one part tax inversion and one part market diversification, but critics have focused mostly on the former. With the combined company movi... [Read More]
August 13, 2014 - 12:11 PM EDT
How ISIS Is Using Taxes to Build a Terrorist State
When does a rebel movement become a state? Scholars have been wrestling with that question for decades, but it's not just an academic exercise. Thanks to the rapid advance of the Islamic State in Iraq and Syria (ISIS), now rebranded as the Islamic State, state creation is an urgent matter of nati... [Read More]
August 5, 2014 - 1:10 PM EDT
The Origination Clause? Let It Go
Last week, a federal appeals court put another nail in the coffin of the origination clause. For those not up to date on legal anachronisms, that's the section of the Constitution requiring that “all Bills for raising Revenue shall originate in the House of Representatives.” In theory, the origi... [Read More]
July 25, 2014 - 11:10 AM EDT
The Corporate Income Tax Will Never Be ‘Fixed.’ And That’s OK.
It's popular, in some circles, to suggest eliminating the corporate income tax. Usually, the argument flows from worries about American competitiveness. Eliminate the corporate tax, and corporations around the world will flock to our shores. Or so the story goes. In fact, it went that way recently... [Read More]
July 18, 2014 - 8:50 AM EDT
Nick Hanauer Wants the Fat Cats to Save Themselves. Here’s Why They Won’t.
Nick Hanauer is a rich guy with a conscience. Over the last few years, he's become the poster boy for plutocratic guilt, urging his fellow 1 percenters to get serious about surging inequality. In particular, he's been a champion for raising taxes on the rich and boosting wages for the working poo... [Read More]
July 9, 2014 - 11:36 AM EDT
When Will the Soda Tax Go Flat?
How many times does the soda tax have to fail before liberals finally give up on it? To be fair, some people actually like this tax. But that group just doesn't seem to include many voters. Attempts to impose a special “sin tax” on sugary drinks have failed in states and localities across the na... [Read More]
June 17, 2014 - 8:41 PM EDT
Stick a Fork in It: Is the Corporate Income Tax Done?
The corporate income tax is dying. Which is hardly surprising, since it's getting on in years. It's a 19thcentury levy struggling to hang on in a 21stcentury economy. And the prognosis is bad. The numbers show a tax in decline. Over the past six decades, the corporate levy has played a shrinking... [Read More]
June 13, 2014 - 8:01 AM EDT
Congress Should Abolish All Tax Breaks for Higher Education
College is hopelessly unaffordable. Only the very wealthy can manage to pay full freight at high-prestige private universities, and even less exalted institutions bleed their students dry. Sure, financial aid provides some help. But the bottom-line cost is still extraordinary, leaving many students... [Read More]
June 3, 2014 - 8:17 PM EDT
Democrats Just Love Their Nanny-State Taxes
Democrats often bristle at the suggestion that they support nanny-state policies. And with good reason, given the GOP tendency to equate any sort of social policy with overbearing big government. But if Democrats don't want to be slandered, they should stop making it so easy. The Tax Foundation rec... [Read More]
May 27, 2014 - 8:34 PM EDT
Bad Ideas Are Like Bad Pennies
Congress figured out 140 years ago that privatized tax collection was a bad idea. Bad ideas are like bad pennies -- they keep turning up. That's especially true in Washington, where lawmakers cling to terrible ideas even after they've failed repeatedly. Congress is now pondering an especially bad... [Read More]
May 15, 2014 - 9:21 AM EDT
George H.W. Bush’s Profile in Pragmatism
Former President George H.W. Bush is famous for many things, including (in no particular order) his pedigree, diplomacy, and a well-established aversion to broccoli. But he's also remembered – and sometimes pilloried – for his fiscal policy. Earlier this month, the John F. Kennedy Presidential L... [Read More]
May 6, 2014 - 5:01 PM EDT
Piketty Is Wrong: Americans Don’t Have a ‘Passion for Equality’
In his new and unlikely bestseller, French economist Thomas Piketty describes the rise of "arbitrary and unsustainable inequalities" that pose a threat to democratic institutions around the globe. He also lays out a plan for curbing those inequalities with a global wealth tax. It's a remarkable and... [Read More]
April 29, 2014 - 2:37 PM EDT
Airlines Say Ticket Taxes Would Be More Visible if They Were Better Hidden
There is something awesomely brazen about airlines calling for “transparent” fare pricing after they've pioneered opacity in their own pricing structures. It was airlines, after all, that rescued themselves from financial disaster by “unbundling” fares and charging consumers for “extras” lik... [Read More]
April 22, 2014 - 5:38 PM EDT
It’s Good to Be the (Ex) President. But It Wasn’t Always.
Former presidents do pretty well for themselves. They get a pension of almost $200,000 a year, plus hundreds of thousands more for office and administrative support. All in all, not a bad gig. But the life of a former president wasn't always so cushy. Until 1959, retiring chief executives got prec... [Read More]
April 10, 2014 - 8:52 AM EDT
How Dave Camp's Failure Might Be Michael Graetz's Victory
Dave Camp's tax reform plan is dead. We know that because everyone says so. And for once, everyone is right. But the death of Camp-style tax reform may be the best thing to happen to tax policy in a long time. A couple of weeks ago, my colleague Marty Sullivan explained some of the reasons why the... [Read More]
March 25, 2014 - 5:36 PM EDT
Raising Taxes on the Rich Won't Balance the Budget -- But It's Still Important
Over the last decade or so, economist Thomas Piketty has made his name central to serious discussions of inequality. Along with his frequent collaborator, Emmanuel Saez, he has provided the empirical foundation for most political arguments about the danger of growing wealth and income disparities.... [Read More]
March 11, 2014 - 5:49 PM EDT
The Last Time Everyone Gave Up on Tax Reform, It Actually Happened
Tax reform is going nowhere. At least that's what the headlines say: New Tax Plan Falls Flat: White House, Congress Wary No Raves for Tax Reform Outlook for Tax Reform: Probability of Higher Payments for Many Indicates Strong Resistance to Any Change Congress Unlikely to Toe the Line: Prospects f... [Read More]
March 4, 2014 - 7:17 PM EST
Filing Your Tax Return Is Terrible -- But It Was Worse 100 Years Ago
Filing season is never easy for anyone -- not for taxpayers and not for the IRS. This year, we've already heard a round of complaints about poor IRS service. The agency is struggling, taxpayers are frustrated, and Congress is outraged. Which makes 2014 just like every other year. But some tax years... [Read More]
February 26, 2014 - 1:08 PM EST
Democrats and Tax Reform: Can't Do It With 'Em, Can't Do It Without 'Em
If you're a Democrat, there's a lot to like in House Ways and Means Chair Dave Camp's tax reform bill. According to early reports, the legislation includes a special surtax on wealthy taxpayers, as well as a new tax on large banks and insurance companies. Camp himself has promised that the bill... [Read More]
February 18, 2014 - 7:44 PM EST
Harry Truman Knew the Truth: IRS Budget Cuts Are Very Expensive
IRS budget cuts don't actually save money. In fact, they're very expensive. Over the past four years, Congress has slashed the IRS budget by roughly 8 percent, saving the government about $1 billion, according to The Boston Globe. But the cuts have also cost that same government about $8 billion in... [Read More]
February 4, 2014 - 7:18 PM EST
Debt Limit Debates Are Good for Theater, Not for Policy Reform
The federal debt limit is an embarrassment, both in practice and by design. Critics insist that the limit is meaningless -- that debt is a function of numerous tax and spending decisions, not some single, arbitrary cap. And those critics have a point. But the debt limit still plays a powerful symbo... [Read More]
January 30, 2014 - 8:37 AM EST
The War on Wealth Is Not New
A few days ago, billionaire venture capitalist Tom Perkins really stepped in it. "I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'" Perkins wrote in a letter to Th... [Read More]
January 21, 2014 - 3:02 PM EST
A Meat Tax? Seriously?
Taxing meat would help slow global warming, according to a new study in the journal Nature Climate Change. By reducing consumer demand, such a levy would curb one of the leading causes of climate change: methane emissions from livestock. Carbon dioxide gets all the headlines, but methane is actuall... [Read More]
January 17, 2014 - 8:37 AM EST
What if the Income Tax Is All About Envy? Would That Be So Bad?
Judging by the rhetoric, liberals are worried about inequality and conservatives aren't. Last month, President Obama called inequality the "defining challenge of our time" and "a fundamental threat to the American dream." But conservatives have refused to panic. "One has to ask," writes Michael Tan... [Read More]
December 17, 2013 - 6:57 PM EST
When Is a “Fee” Actually a Tax? When Politicians Say It Isn’t
Politicians are, by nature and necessity, truth-challenged. It's tempting to call them liars, but that would be harsh, so let's stick with the euphemism. After all, that's what politicians do when it comes to taxes. As everyone knows, the "breakthrough" budget deal now pending in the Senate include... [Read More]
December 12, 2013 - 8:59 AM EST
Congress Is Making a Bad Deal on the Budget, but One Republican Has a Better Idea
It's amazing what passes for success in Washington these days. Budget negotiators on Capitol Hill have delivered a non-disaster, cobbling together a pathetic half-measure that pleases no one and accomplishes almost nothing. True, it allows Democrats and Republicans to avoid abject failure, which i... [Read More]
December 3, 2013 - 7:17 PM EST
The Cold War Is Over, but No One Told the IRS
The Cold War ended more than 20 years ago, but the battle against global communism rages on – at least in the pages of the Internal Revenue Code. Since the early 1990s, Congress has repealed numerous laws that were once intended to thwart the international communist conspiracy. But along the way,... [Read More]
November 12, 2013 - 4:35 PM EST
When Tax Reform Rises From the Dead, What Will It Look Like?
As I've said before, tax reform is well and truly dead. But that doesn't mean it's gone forever. Bad ideas, like bad pennies, have a way of coming back. And so do good ideas, which often need time to ripen; few reforms make it through the legislative gantlet on the first try. But death changes thin... [Read More]
November 5, 2013 - 7:15 PM EST
Forget Carried Interest--It's All About Taxing Capital Gains
For a complex tax issue, carried interest sure gets a lot of media attention. That's probably because it involves many very rich hedge fund managers -- the kind of people who everyone loves to hate, admire, and envy, thanks to their "hugely outsized earnings." But the debate over how to tax profits... [Read More]
October 29, 2013 - 7:06 PM EDT
It’s Time to Give Up on Tax Reform
Everyone likes to believe in tax reform – if only because everyone likes to hate on the existing tax system. But tax reform is hopeless in our current political environment, and it's time to throw in the towel. At least for now. According to the optimists, Congress is dead-dog serious about tax r... [Read More]
October 22, 2013 - 7:33 PM EDT
The Gas Tax Doesn't Work Because Politicians Broke It
Big business wants to raise the gas tax and spend the money on infrastructure. Which sounds like a great idea, since that's what the gas tax is supposed to pay for anyway. But the tax is broken, thanks to Congress, which has refused to raise it for two decades. "Twenty years,” exclaimed Thomas Do... [Read More]
October 15, 2013 - 8:17 PM EDT
Debt Limit Fights Are All the Same – Except for This One
The United States may or may not be on the verge of default, but financial markets seem unworried. Maybe savvy investors know something the rest of us don't. Maybe they know, for instance, that past arguments over raising the debt ceiling have always ended short of disaster. History counsels compla... [Read More]
October 8, 2013 - 4:21 PM EDT
After the Debt Limit Crisis, Can Democrats Be the Party of Big Business?
Wall Street isn't buying all the tough talk about default coming from the Republican fringe. “We've seen this movie before,” one portfolio manager told The New York Times. “We know how it's going to end.” Fair enough: Recent history suggests that lawmakers will eventually snatch solvency fro... [Read More]
October 1, 2013 - 4:18 PM EDT
The GOP Is Right About One Thing: Ditch the Medical Device Tax
Amid all the bad ideas floated by House Republicans during the shutdown fight, one was actually pretty good: repealing the medical device tax. When Congress enacted the Affordable Care Act in 2010, it included a 2.3 percent excise tax on the sale of medical devices. As the Center on Budget and Poli... [Read More]
September 24, 2013 - 7:15 PM EDT
Does the Economy Need Stimulus or Austerity? Yes.
For years now, Washington has been saturated with arguments about stimulus and austerity. Or more precisely, stimulus or austerity, because in Washington, you can't support both. You're either a free-spending liberal or a tight-fisted conservative – no fence sitting allowed. In fact, however, th... [Read More]
September 17, 2013 - 4:41 PM EDT
Two Cheers for a Government Shutdown
If we're lucky, the federal government will shut down two weeks from today. It won't be pretty, and it will be expensive. (As the Congressional Research Service recently pointed out, flicking the lights on and off isn't free.) But a shutdown might actually be good for us. Specifically, it might e... [Read More]
September 11, 2013 - 7:42 PM EDT
Republicans Once Hated Debt Even More Than Taxes
The Republican Party has changed a lot over the last half-century, and nowhere is the transformation more obvious than during debt ceiling debates. In recent weeks, GOP leaders have demanded a variety of things in exchange for raising the borrowing cap. Yesterday, House Majority Leader Eric Cantor... [Read More]
September 3, 2013 - 5:02 PM EDT
Republicans Are Confused About Their Leverage in the Debt Debate
Washington is poised for a big fight over credibility, as Congress debates the appropriate American response to Syrian chemical weapons. Some observers have speculated that the vote will expose important divisions within the GOP, which seems entirely possible. Meanwhile, however, another issue seem... [Read More]
August 27, 2013 - 2:40 PM EDT
Can Debt Ceiling Debates Be Useful? History Says Maybe.
Are threats to oppose a debt ceiling increase ever defensible? More specifically, can they ever be justified as a form of leverage—as a tool to force politicians to make difficult but necessary decisions? Republicans seem to think so. Yesterday, the Treasury predicted that the nation would hit the... [Read More]
August 20, 2013 - 6:07 PM EDT
Does the Charity Deduction Keep Government Small?
If you believe Max Baucus and Orrin Hatch, every tax preference is on the table these days. The Senate's "blank slate" approach to tax reform treats all preferences equally, in the sense that all are equally vulnerable. But in fact, some preferences are probably more equal than others. Take the de... [Read More]
August 6, 2013 - 2:32 PM EDT
Treating Twinkies Like Crack
If Rep. Rosa DeLauro gets her way, you might see fewer ads for Twinkies, Devil Dogs, and Yodels in the years to come. The Connecticut Democrat recently introduced legislation to close a “loophole” permitting companies to deduct advertising expenses for marketing “unhealthy food products” to chi... [Read More]
July 23, 2013 - 4:48 PM EDT
Wealth Taxes to Cure Inequality? How About Tax Reform Instead.
What are the prospects for a new federal tax on wealth? Pretty good, if you think surging inequality will trigger a populist revolt. But not so good if you think history has anything to teach us. According to some observers, a wealth tax is just around the corner. "If you'd like to know where Amer... [Read More]
July 16, 2013 - 6:31 PM EDT
Tax Expenditures Should Be Attacked Head On, Not Through the Backdoor
Everybody hates tax expenditures – except voters and the politicians who coddle them. This reality makes it hard to curb the cost of these expenditures, especially when they promote good and popular things like home ownership, health insurance, and pensions. But tax expenditures are expensive, and... [Read More]
July 9, 2013 - 4:13 PM EDT
House Republicans Would Rather Pander than Fix the IRS
Nice to see that House Republicans are staying true to form. Faced with the prospect of actually governing, they've once again chosen to pander and pose instead. Unfortunately, taxpayers are going to pay the price for this predictability. Earlier today, the House Appropriations Committee released... [Read More]
July 2, 2013 - 1:27 PM EDT
Milton Friedman Didn't Believe in Tax Reform
You have to admire the impulse. Max Baucus and Orrin Hatch don't like the tax system and they want a fresh start. Who can blame them? After all, why should we assume that existing tax incentives are worth keeping? Shifting the burden of proof to those seeking a tax break seems only reasonable. But... [Read More]
June 26, 2013 - 3:18 PM EDT
So the IRS Hounded Liberals Too – But We’ve Still Got a Problem
The IRS scandal, such as it is, has gotten less scandalous in recent days. Revelations that the agency scrutinized exemption applications from liberal as well as conservative groups has deflated some of the more overheated conspiracy theories. And rearguard efforts by conservative activists to keep... [Read More]
June 18, 2013 - 5:18 PM EDT
Are Republicans Throwing in the Towel on Tax Reform?
Does tax reform have to be bipartisan? Not necessarily. Decades ago, when Democrats held all the levers of power, they managed to push through some sweeping reforms without much help from their Republican colleagues. But in the modern era of divided government, tax reform is almost certainly going... [Read More]
June 11, 2013 - 2:43 PM EDT
It's Time to Stop Talking About Tax Reform
Enough already: it's time to stop talking about tax reform. Not about necessary and useful changes to the tax code – by all means, let's talk about them. But let's do away with anodyne invocations of “tax reform” as a useful shorthand for this debate. The phrase probably meant something once,... [Read More]
June 4, 2013 - 6:39 PM EDT
IRS Bashing Can Be Fun But Also Expensive
Beating up on the IRS is lots of fun, and in recent weeks, it's been a bipartisan pastime. In fact, the agency itself has gotten into the act. "Like so many, the IRS community is shocked and appalled at the use of political labels inside one part of the organization,” acting commissioner Danny We... [Read More]
May 28, 2013 - 4:18 PM EDT
Krugman Berates a Bush -- Unfairly
Paul Krugman is not a nice guy, and he's willing to admit it. “I am a big meanie," he wrote recently on his blog. Of course, there's a lot of snark in that confession, but a lot of truth, too. Krugman doesn't suffer fools, gladly or otherwise. But he's also quick to call someone a fool in the f... [Read More]
May 21, 2013 - 3:32 PM EDT
A World Without 501(c)(4)s
Should we get rid of 501(c)(4)s? Last week, the New York Times put that question to a range of tax experts and got back (predictably) a range of reasonable answers. Most involved some sort of intermediate reform involving the political activities of "social welfare" organizations. One expert, howev... [Read More]
May 14, 2013 - 11:55 AM EDT
Is the IRS Overzealous, Indifferent, or Both? Yes.
Seems like only yesterday that Tea Party groups were the villains, not the victims, in stories about nonprofit political activity. Because it was yesterday, or close to it. For the last few days, Washington has been consumed by worry and indignation over an IRS admission that the agency was targeti... [Read More]
May 7, 2013 - 2:34 PM EDT
A Lost Age of Fiscal Heroes? Not So Much.
On May 19, the federal government will reach its statutory debt limit. To keep the wheels turning, the Treasury will then deploy a variety of “extraordinary measures” that have become really quite ordinary in recent years. At which point – probably in the fall sometime – lawmakers will run up a... [Read More]
April 30, 2013 - 12:57 PM EDT
When Tax Reform Means Soaking the Rich
Tax reform has evolved into one of the emptier platitudes of U.S. politics. Politicians support "tax reform" in the same way that they support "a strong national defense," "fiscal responsibility," and "pro-growth economic policies." It's a brave statement in search of a challenge. Is anyone ever ag... [Read More]
April 16, 2013 - 4:51 PM EDT
The Charity Deduction and Big Government
When you filed your tax return, did you claim a deduction for charitable giving? Chances are pretty good that you did, since roughly 80 percent of itemizers do. The charity deduction is one of the oldest provisions of the income tax, dating from 1917. And over the years, it's also been one of the... [Read More]
April 10, 2013 - 7:40 PM EDT
How Democrats Will Destroy Progressive Government
As Americans rush to file their tax returns, there's no better time to reflect on how long we've been doing this. Monday will mark our 100th year of struggling with our tax forms and rushing them to the post office in time for a midnight deadline. (For a video exploring the last century of taxpay... [Read More]
April 3, 2013 - 6:11 AM EDT
Hate Filing Your Tax Return? Good.
Is there anything good about filing a tax return? For most of us, of course, it's a necessary ritual if we hope to stay on the right side of the law. And it certainly keeps the wheels turning for the federal government. But is there another, more high-minded value to this annual April unpleasantnes... [Read More]
March 26, 2013 - 3:50 PM EDT
Why the Tea Party Should Support Soda Taxes
Want to shrink the size of government? Then start by imposing a soda tax. It's the quickest way to jumpstart a tax revolt. In an article for the The New York Times last Sunday, Cornell economist Robert H. Frank endorsed a special tax on sugary sodas. “We have to tax something, after all, and taxi... [Read More]
March 19, 2013 - 3:00 PM EDT
It's Not Too Late for a War Tax
In case you needed another reason to support a special war tax, try this on for size: The United States is still paying veterans' benefits to the children of Civil War soldiers. According to the Associated Press, two survivors are each receiving $876 dollars a year. Meanwhile, 10 children are still... [Read More]
March 15, 2013 - 1:15 PM EDT
America May Be on the Wrong Track, But Is Paul Ryan's the Right One?
Yesterday, Speaker of the House John Boehner blamed Republican losses in the last election on bad candidates rather than bad ideas. That's a comforting thought, especially if you're in the business of electing Republicans: just swap out the candidates and you're good to go. Bad ideas, on the othe... [Read More]
February 25, 2013 - 4:34 PM EST
The Income Tax is NOT Turning 100 – Yet
Today is not the centennial of the income tax. If you're chomping at the bit to celebrate – and you're determined to ignore the Civil War version of the tax passed in 1862 – then you still have some waiting to do. Exactly 100 years ago, Secretary of State Philander Knox certified that the 16th... [Read More]
February 20, 2013 - 3:39 PM EST
A Century of Soaking the Rich
Originally, the income tax was a rich man's problem. Next week, Americans will celebrate – or mourn – the 100th birthday of the 16th Amendment to the Constitution. On February 25, 1913, Secretary of State Philander Knox formally certified ratification, establishing once and for all that Congress... [Read More]
January 29, 2013 - 12:37 PM EST
The Income Tax Is Inquisitorial -- Get Over It
Apparently, the Italians have found a way to make their unpopular income tax even more unpopular. In the face of rampant cheating, they've adopted a new enforcement technique. Now, instead of just pawing through paychecks, bank statements and the like, officials will also scrutinize spending habits... [Read More]
January 11, 2013 - 3:02 PM EST
Peggy Noonan and the Beleaguered 1 Percent
Peggy Noonan, former Reagan speechwriter and current Wall Street Journal columnist, thinks Republicans need to step up their game. Actually, her preferred metaphor has something to do with “pirate time,” which presumably implies political derring-do and all that. Ultimately, however, what Noonan'... [Read More]
January 1, 2013 - 2:50 PM EST
Is Obama the Worst Legislative Negotiator of the Last Century?
Some day, I’d like to get President Obama at my poker table. Whatever your feelings about the fiscal cliff and its optimal resolution, one thing is clear: Obama doesn’t know a winning hand when he sees it. On the merits, yesterday's fiscal cliff deal is pathetic. It does nothing to solve the nati... [Read More]
December 18, 2012 - 7:01 PM EST
Republicans Shouldn’t Pin Their Hopes on The Origination Clause
In negotiations over the fiscal cliff, President Obama holds the stronger hand, thanks to the oddities of current law (with its myriad expiring provisions) and the electoral misfortunes of the GOP (including Mitt Romney's defeat, but also the party's failures in the Senate). But Republicans aren'... [Read More]
December 14, 2012 - 2:55 PM EST
Deficit Hysteria and Debt Denialism
A few years ago, Berkeley economist Brad DeLong proclaimed his faith in Paul Krugman. “If the past decade has taught me anything, it has taught me that mistakes are avoided if you follow two rules,” DeLong wrote. “(1) Remember that Paul Krugman is right; (2) If your analysis leads you to conclud... [Read More]
December 4, 2012 - 5:22 PM EST
Moral Abdication Dressed Up Like Hard-Nosed Realism
President Obama's "fair share" rhetoric really drives some people crazy. And by some people, I mean conservatives, because liberals are generally happy to link morality and economics. But for a certain type of conservative, the link is both specious and dangerous; specious because economics and mor... [Read More]
November 27, 2012 - 5:14 PM EST
Grover May Be Over But Antitax Republicans Aren't
Long the object of liberal scorn, Grover Norquist is now the source of left-leaning glee. In recent weeks, the polarizing president of Americans for Tax Reform has struggled with a series of defections from his famous anti-tax manifesto, the Taxpayer Protection Pledge. Which has got a lot of media... [Read More]
November 16, 2012 - 9:22 AM EST
Is There a Tax Reform Consensus?
Is tax reform simple? In an article for the Wall Street Journal, Gerald Seib suggests that maybe it is, at least in theory: The broad outlines of what needs to be done are pretty well known. There is even something of a consensus. Serious thinkers in both parties would agree that rates should be lo... [Read More]
November 5, 2012 - 12:23 PM EST
Soda Taxes and the Case for a GOP Majority
Soda taxes are one of those ideas that makes me want to be a Republican. They give substance to the (generally baseless) charge that liberals want a nanny state. Every sin tax makes sense to someone. In theory, we could craft millions of tiny little taxes to compensate for every "market failure" we... [Read More]
November 2, 2012 - 6:10 PM EDT
Muzzling CRS is a Bad Idea -- Even for Republicans
Everyone likes a fan and no one likes a critic. Which is why the Congressional Research Service finds itself in hot water these days. The story begins in mid-September, when CRS – a division of the Library of Congress providing research support to lawmakers – released a study on the economic effe... [Read More]
June 4, 2012 - 6:38 PM EDT
Loose Talk About Nazis and Tax Policy
When two Democratic senators proposed a bill to increase the penalties on billionaire expatriates, Grover Norquist, president of Americans for Tax Reform, offered a typically helpful suggestion. The lawmakers should look to Nazi Germany for inspiration, he said. "I think Schumer can probably find t... [Read More]
March 29, 2012 - 5:37 PM EDT
Let's Require the Full Monty for Candidate Tax Returns
Enough already. It's time to stop begging, pleading, cajoling, and threatening. If we want our presidential candidates to release their tax returns, let's make it a legal requirement. Over the next couple of weeks, all the candidates running for president will release their 2010 personal tax return... [Read More]
March 27, 2012 - 12:10 PM EDT
When the IRS Used to Sing for its Supper
Most people don't break into song when they think about taxes. (More likely, they start cursing under their breath.) But once upon a time, the IRS tried to sing taxpayers into compliance. Last week, NPR's Planet Money did a great podcast on the history of the income tax. (Self-promotion alert: I wa... [Read More]
January 26, 2012 - 12:21 PM EST
Romney Returns Show Wealth Should Be Taxed Like Work
To no one's surprise, except perhaps his own, Republican presidential candidate Mitt Romney has released his 2010 tax return and an estimated 2011 return. What a mess. If Newt Gingrich wins the GOP nomination, he'll owe that victory to Romney's colossal miscalculation. After all, it's not like the... [Read More]
January 25, 2012 - 10:57 AM EST
Bartlett's Not-So-Familiar Quotations
Bruce Bartlett is every liberal's favorite conservative. In 2006 he published Impostor, a scathing indictment of President George W. Bush that earned him immediate exile from the ranks of the Republican faithful. Liberals responded with the kind of warm embrace reserved for apostates from the other... [Read More]
November 16, 2011 - 10:07 AM EST
The Smart Money Says Deadlock
In politics, the smart money is always cynical. It bets on inertia, not change; on symbols, not substance. Hope? Progress? Suckers' bets. The smart money isn't always right, but when it comes to the so-called supercommittee, it's made a safe bet. With a week to go, the panel seems unlikely to reach... [Read More]
November 8, 2011 - 5:00 PM EST
Veterans Job Credit is Feel-Good Tax Policy -- and a Distraction
The Senate is poised this week for another exercise in strictly symbolic politics.The VOW to Hire Heroes Act -- a pair of job creation tax incentives extracted from the ruins of President Obama's failed stimulus measure -- seems likely to get a vote in the next few days. Let's hope it passes, so we... [Read More]
September 2, 2011 - 11:32 AM EDT
When it Comes to Capital Gains, Huntsman is Talking Nonsense
In his recently unveiled tax plan, GOP presidential candidate Jon Huntsman gets things seriously wrong on the subject of capital gains. Here's what Huntsman has to say: Capital gains and dividend taxes amount to a double-taxation on individuals who choose to invest. Because dollars invested had to... [Read More]
August 15, 2011 - 4:39 PM EDT
What Passes for a Big Idea in Washington
Some wild White House advisers are just itching to trot out a bold new economic plan, according to the New York Times. The milquetoast crowd -- led by David Plouffe and William Daley -- support small bore initiatives, like free trade agreements and patent reform. By contrast, those wild radicals in... [Read More]
August 1, 2011 - 4:26 PM EDT
Why Liberals Should Learn to Love the Debt Debate
The debt limit crisis is the best thing to happen to liberalism in 30 years. It's a manufactured crisis, of course. Republicans conjured it out of thin air, convinced that it will force a radical -- and permanent -- reduction in the size of government. But they're wrong. Far from starving the beast... [Read More]
July 15, 2011 - 11:52 AM EDT
Not Grover: Who's the Progressive Counterpart to Norquist?
Grover Norquist is everywhere. In recent weeks, the head honcho at Americans for Tax Reform has been profiled, lauded, or excoriated by a slew of media outlets. I was interviewed earlier this week for a piece on NPR, and a quick search turns up recent items at CNN, The Week, the Washington Post, an... [Read More]
July 13, 2011 - 3:45 PM EDT
The Last Time Taxwriters Played Nice, Uncertainty Was the Issue
Today, the House Ways and Means Committee and the Senate Finance Committee held a joint hearing on tax reform. Which is the same subject they took up during their last joint hearing, 71 years ago. Then, as now, one of the key arguments for reform was the business community's demand for "certainty."... [Read More]
June 16, 2011 - 3:20 PM EDT
Reagan Was Wrong About Tax Complexity
The tax code is complicated enough -- did President Ronald Reagan really have to make it worse by misquoting it? In 1986, Reagan began a famous speech with a selection, of sorts, from the Internal Revenue Code. For purposes of Paragraph (3), an organization described in Paragraph (2) shall be deeme... [Read More]
April 27, 2011 - 4:58 PM EDT
It May Be Legal But It Ain't Always Right
Tax avoidance is legal and tax evasion is not. Simple distinction, but not always relevant, at least not in politics. Consider the recent burst of outrage over corporate tax avoidance generally and General Electric's tax bill in particular. In some years, GE's tax schemes might have escaped public... [Read More]
April 14, 2011 - 3:28 PM EDT
Think Taxes are Too Complicated? They Thought So in 1915, Too
Other than "too much," the most common complaint about the income tax is probably "too complicated." Fair enough. But let's not turn this legitimate objection into another count in the indictment of modern American government. The income tax today is complex, but it was complex in decades past, too... [Read More]
March 30, 2011 - 2:44 PM EDT
God and Grover Norquist: If They Didn't Exist, We'd Have to Invent Them
You know things are looking up when Grover Norquist is catching flack for being soft on tax hikes. In a surreal exchange between the GOP's Martinet of Fiscal Conformity and the Georgia Tea Party Patriots, Norquist has emerged as a champion of creeping socialism. How exactly did this paragon of cons... [Read More]
March 17, 2011 - 2:06 PM EDT
Presidents Paying Taxes, Abraham Lincoln Edition
A few days ago, Joe Henchman of the Tax Foundation posted a fascinating item on Warren Harding's tax bill for 1922. The president paid $17,000 in tax, Henchman reported, on a presidential salary of $75,000. Apparently, this was the first time a president had filed a tax return, since Woodrow Wilson... [Read More]
March 16, 2011 - 11:40 AM EDT
Kickin' It Old School: Tax Avoidance c. 1937
Think tax avoidance is worse today than ever before? Well, maybe it is. But consider this complaint from nearly 75 years ago: "The investigation of the income tax returns for each successive year reveals the increasingly stubborn fight of wealthy individuals and corporations against the payment of... [Read More]
February 21, 2011 - 12:14 PM EST
The Power of Pain: Do Your Own Damn Taxes
Tim Pawlenty thinks members of Congress should be forced to do their own taxes. And people seem to like the idea. "Watching our elected representatives take on the challenge, broken pencils and all, could make for some entertaining moments — a kind of reality TV meets C-Span," observes John Schwar... [Read More]
February 18, 2011 - 12:03 PM EST
Tax Reform Wisdom, c. 1884
Tax reform always seems like such a good idea -- and such an obvious one -- that it's easy to forget how hard it can be. But it is hard, not least because existing tax structures tend to be well-entrenched. That's a fact that reformers confront with regularity. Consider this comment from 1884: But... [Read More]
February 16, 2011 - 4:25 PM EST
The Real Problem With Keynesianism
Ezra Klein thinks Keynesianism has a serious political problem. Keynesianism might be good economics, but persuading people that the right response to a recession caused by overspending and running up debt is for the government should start spending heavily and running up debt is a bit like trying... [Read More]
January 26, 2011 - 8:10 AM EST
Will Business Kill Tax Reform?
Corporations like to complain about their taxes. In testimony, statements, and speeches, executives rehearse the same old litany of woe. Rates are too high! We pay too much! We can't compete with foreign companies! There's a kernel of truth in these complaints. U.S. corporate tax rates are among th... [Read More]
December 15, 2010 - 10:59 AM EST
Why Liberals Should Like Tax Reform
Tax reform is one of those feel-good ideas that everyone likes. And recently, we've been hearing a lot about it. President Obama's blue-ribbon debt commission (do commissions come in any other color?) floated a couple of different plans for revamping federal revenue. So did a similar panel sponsore... [Read More]
November 24, 2010 - 12:56 PM EST
In Defense of Tax Reform Fantasies
My colleague Marty Sullivan is unconvinced by recent arguments for pairing deficit reduction with tax reform. "Tax reform is one of the most arduous tasks Congress could ever undertake," he points out. "So is massive deficit reduction. What is it that makes people think that doing both simultaneous... [Read More]
October 22, 2010 - 2:45 PM EDT
Immoral Tax Avoidance? No Such Thing.
Tim Fernholz recounts his thoughts on Google's now-famous tax avoidance: Seriously, though, after reading this article about Google's evasion of $3.1 billion in tax obligations through legal loopholes, I got into a Twitter argument with's Kevin Glass about whether this move is a violat... [Read More]
October 22, 2010 - 10:16 AM EDT
Heretic! Apostate! "So-Called" VAT Lover!
Pity the lost soul of Mitch Daniels. Long a paragon of virtue and morality, he has strayed from the True Faith. In a recent speech to conservative bigwigs, Daniels suggested that a value-added tax, coupled with a flat-rate income tax, might be a reasonable basis for tax reform. For this unpardonabl... [Read More]
September 17, 2010 - 11:22 AM EDT
And Then There Was One: When Tax Brackets Get REALLY Narrow
As debate over extending all/most/some/none of the Bush tax cuts continues to heat up, liberals are giving new attention to an old idea: special tax brackets for the super rich. It's easy to forget -- especially in this bracket-starved era when lawmakers have left us with just half a dozen lines of... [Read More]
September 14, 2010 - 8:51 AM EDT
Republicans Have Abandoned Tax Reform. Because Grover Told Them To.
What are the prospects for old-fashioned tax reform — trading lower rates for a broader base? During an inteview on NPR yesterday, I touted the old mantra as the best sort of tax policy. But I have to admit, its political viability seems dubious, at least in an era when Grover Norquist calls the s... [Read More]
August 9, 2010 - 2:39 PM EDT
When Was the Last Time a Politician Really Leveled with the American People?
We take it for granted these days that politicians will always suck up to voters. Even appointed officials feel compelled to flatter the electorate. But once upon a time, political leaders felt a bit freer to speak their minds. Consider the words of U.S. Treasury Secretary Ogden Mills in 1931, tryi... [Read More]
August 4, 2010 - 2:40 PM EDT
The Mostly Dead Tax on "Swollen Fortunes"
As debate rages over the estate tax -- mostly dead but not yet all dead, to use Billy Crystal's distinction from the Princess Bride -- it's worth a glance back a century or so. In August 1910, Teddy Roosevelt delivered his famous speech on the New Nationalism, insisting that government had a respon... [Read More]
July 5, 2010 - 2:37 PM EDT
The Income Tax, as American as Apple Pie
In a debate over carbon taxes, Steve Everley, policy director for Newt Gingrich's American Solutions, makes a dubious historical observation: The last time we imposed a tax regime of this scale was when the Progressives convinced us we needed an income tax. Four years after the 16th Amendment, Cong... [Read More]
June 2, 2010 - 3:30 PM EDT
Tax Complexity and "Sullen Animosity"
People have been complaining about tax complexity for ages. Maybe forever. Here's a tidbit from 1920, published by Wall Street titan and prominent arts patron Otto H. Kahn: One of the essentials of wise taxation is simplicity of method. Nothing tends more to create a sullen animosity against fiscal... [Read More]
May 18, 2010 - 4:20 PM EDT
Tax History Hits the Airwaves
First a movie, now live radio. Hard on the heels of April's blockbuster release, An Inconvenient Tax, we now have a radio program devoted to tax history. On Thursday, public radio's Backstory will tape a live show covering the whole shebang -- from Tea Party (1773) to Tea Party (2010). For anyone l... [Read More]
April 27, 2010 - 8:53 AM EDT
Just Too Damn Rich
In a fiery little blog post, Matt Yglesias musters some genuine moral outrage about inequality. Some people are "just too damn rich," he writes. "It’s greedy, absurd, and morally indefensible for talented people born in favorable circumstances to be dedicating their lives to accumulating huge sums... [Read More]
April 13, 2010 - 11:21 AM EDT
Something You Should Know About Tea Parties, Past and Present
If the modern Tea Party movement makes you uneasy, then get in line: you have plenty of historical company. The original Tea Party -- the one in Boston -- has long been a touchstone of American nationalism. Kids learn about in grade school, and almost everyone knows the story of Sam Adams, his phon... [Read More]
March 4, 2010 - 9:36 AM EST
Calvin Coolidge, Tea Partier?
Today marks the 85th anniversary of Calvin Coolidge's one and only inaugural address. Silent Cal had been president since 1923, assuming the office when Warren Harding died. But he won the job in his own right during the 1924 election, and his March 4 inauguration gave him a chance lay out his big... [Read More]
January 26, 2010 - 9:11 AM EST
The (Mis)Usable Past of the Stock Transaction Tax
In a recent item for ChamberPost, Tom Quaadman makes this observation about the stock transaction tax: Ironically, in 1932 President Hoover had Congress pass a dramatic increase to the then existing stock transaction tax to stop what he thought was needless speculation. The result- 60 days after th... [Read More]
January 25, 2010 - 8:09 AM EST
The Root of All (Fiscal) Evil
Want to know what's wrong with federal taxes? Just read Tom Friedman's advice to the president: Obama should bring together the country’s leading innovators and ask them: “What legislation, what tax incentives, do we need right now to replicate you all a million times over” — and make that his... [Read More]
January 11, 2010 - 2:11 PM EST
When Only the Feds Have to Pay Taxes
Conservative superstar Glen Beck apparently has a tax problem. Not a big one, mind you, but not a trivial one either. Which makes him just like a lot of other decent, responsible people who find themselves on the wrong side of an IRS interview. Except that Glen Beck is not like everyone else. He's... [Read More]
January 7, 2010 - 3:42 PM EST
How Old Was the Estate Tax When It Died?
Over at the Huffington Post, Chris Kelly did a nice little send-up of the estate tax debacle. Taking his cue from the untimely death of baby-oil heiress Casey Johnson, Kelly points out that Johnson's fiance, Tila Tequila, will at least be spared a tax bill. This may shock you, if you think you live... [Read More]
December 22, 2009 - 5:20 PM EST
C. Lowell Harriss, R.I.P.
Apparently, the world can only mourn one economist at a time. Paul Samuelson's death on December 13 made headlines around the world. By contrast, the passing of C. Lowell Harriss on the following day made barely a ripple. As far as I can tell, no newspaper has published an obituary for Harriss. Not... [Read More]
December 1, 2009 - 8:50 PM EST
Ben Nelson Needs a History Lesson
Nebraska Senator Ben Nelson has made a career out of being every Republican's favorite Democrat. But the next time he feels compelled to trash the proposal of a fellow Democrat, he might stop to consider whether he knows what he's talking about. Take his comments on the recent proposal for a war ta... [Read More]
December 1, 2009 - 10:17 AM EST
Gas Tax for the War?
The Washington Post has reluctantly signed on to the notion of a special war tax for Afghanistan. (It was apparently a painful decision, given the amount of ink the editors devoted to arguing against its necessity.) But the Post is not enamored of the various proposals for an income tax surcharge t... [Read More]
November 24, 2009 - 5:46 PM EST
Finally, Some War Tax Talk
Will wonders never cease. After ignoring moral and economic imperaives for the better part of a decade, policymakers are finally talking about a war tax. New legislation proposed by Rep. David Obey, D-Wisc., would impose a modest, graduated surtax to help fund the war in Afghanistan. Obey offered a... [Read More]
November 17, 2009 - 2:29 PM EST
More Something for More Nothing
Senate Majority Leader Harry Reid is considering a Medicare tax hike to help pay for health care reform. More specifically, he wants to raise taxes on rich workers to subsidize health care for the rest of us. And Americans love the idea (at least in general terms). Of course they do. Doesn't everyo... [Read More]
November 11, 2009 - 12:34 PM EST
Of Death, Taxes, and Death Taxes
A couple of weeks ago, the blogosphere saw a flurry of indignation over the notion of "death taxes." Here at, Chris Bergin chastised Rep. Sam Graves for his insistence that "death should not be a taxable event." Elsewhere, Brad DeLong, Stan Collender, and Linda Beale also took aim at this... [Read More]
October 23, 2009 - 2:32 PM EDT
All the (Tax) News from Norway
Norwegian tax authorities released their annual tax list this week, outlining the income and total wealth of nearly every taxpayer in the country. According to the Associated Press, the data has been released annually for many years. In 2004, a conservative government briefly banned the practice, b... [Read More]
October 8, 2009 - 12:18 PM EDT
Why Everyone Should Like ReadyReturn -- Even the Tax Foundation
Law professor Dennis Ventry has accused Intuit of trying to kill ReadyReturn, California's free, state-provided service that simplifies filing by giving taxpayers a completed version of their state tax return (using information already in the state's possession). The Tax Foundation has jumped to In... [Read More]
September 30, 2009 - 5:28 PM EDT
Time for a War Tax
The United States has been fighting its wars in Iraq and Afghanistan for a long, long, long time. But after eight years, American political leaders still haven't leveled with the American public about the staggering financial cost of these wars. Sure, from time to time, Congress debates special war... [Read More]
September 28, 2009 - 3:42 PM EDT
A Tax Credit for Liposuction?
Watch out, fat cats: populists and lipophobes are on the march. Americans want to tax your incomes and your waistlines. In a recent 60 Minutes/Vanity Fair poll, respondents were asked the following question: If the Obama administration proposed a tax of 50 percent or higher on the incomes of the we... [Read More]
September 24, 2009 - 2:16 PM EDT
The Watertight Case for Taxing Everything
I have a certain fascination with tax fads. You know what I mean -- those odd, improbable, and sometimes appealing tax ideas that capture the public imagination from time to time. But seriously: this soda tax has got to go away. It was fun for a while, even intriguing. But it's a bad tax -- regress... [Read More]
September 9, 2009 - 4:00 PM EDT
The Importance of Experts
Bruce Bartlett, now blogging at Capital Gains and Games, thinks the healthcare debate suffers from a lack of thoughtful, dispassionate, expert advice. Sure, the Capitol echoes with the opinions of healthcare experts, self-appointed and otherwise. But the Obama administration has failed to provide a... [Read More]
September 1, 2009 - 5:35 PM EDT
Rangel Should Resign
There's a lot to like about Charlie Rangel. As chairman of the House Ways and Means Committee, he's been principled without being doctrinaire, progressive but not polemical. In recent years, he's also been the voice of relative reason in a political arena shot through with partisan claptrap. His sc... [Read More]
August 11, 2009 - 12:02 PM EDT
In Defense of the Broad Brush
Recent efforts to curb executive pay, especially on Wall Street, are facing predictable problems. But the return of the guaranteed bonus is just one of many pitfalls. As lawmakers have discovered in the past, regulation designed to cap compensation are prone to failure. Matthew Yglesias explains wh... [Read More]
August 10, 2009 - 11:06 AM EDT
Will Americans Foot the Bill?
Gregory Clark, an economist at UC-Davis, has peered into the future, and he's not happy: In the next chapter, abundance beckons -- for some. Advances in technology drive economic growth, and there is no sign that they are slackening. The American economy is likely to continue unabated on the upward... [Read More]
July 24, 2009 - 3:06 PM EDT
The Surtax Shouldn't Be a Progressive Priority
I'm no fan of the surtax, chiefly because I think it threatens the long-term viability of healthcare reform. If people aren't willing to pay for reform, then they won't defend it when things get ugly. (And they will get ugly, especially when Democrats eventually lose their lopsided majorities.) But... [Read More]
July 21, 2009 - 12:16 PM EDT
Dysfunctional Business Taxes: Yesterday, Today, Forever
Consider the comments of an eminent economist: Over the past half-century or more there has developed in this country a fairly elaborate structure of federal and state business taxes. This structure, as it is now constituted, is generally recognized to be singularly devoid of any plan and to be inc... [Read More]
July 10, 2009 - 11:19 AM EDT
Healthcare Taxes: What Would FDR Do?
It was always going to come down to the money. Democrats have spent months hashing out the details of healthcare reform, but they left the worst for last: how to pay for the damn thing. Sure, they floated a few trial balloons. President Obama even offered some plausible suggestions. But as a group,... [Read More]
July 7, 2009 - 4:09 PM EDT
Who Should Pay for Healthcare Reform?
House members are considering a surtax on rich people to finance healthcare for the rest of us, according to Bloomberg's Ryan Donmoyer. The tax would be similar to, yet much smaller than, a surtax proposed in 2007 by Ways and Means Committee Chairman Charles Rangel, a person familiar with the commi... [Read More]
July 2, 2009 - 11:20 AM EDT
Recovery Through Reform? Wouldn't It Be Nice
Sometimes, politics can make for incoherent policy. Economist Tyler Cowen makes that point while mulling the healthcare debate: First, the idea of an employer mandate for healthcare is a tax on hiring labor in a time when, if anything, the hiring of labor should be subsidized. On top of that is th... [Read More]
June 29, 2009 - 10:48 AM EDT
When a Tax Hike Is, in Fact, a Tax Hike
Over the weekend, President Obama opened the door to a new tax on employer-provided health benefits. Speaking on ABC's "This Week," his chief political adviser, David Axelrod, acknowledged that such a tax would violate Obama's promise to avoid new levies on anyone earning less than $250,000 a year.... [Read More]
June 22, 2009 - 5:47 PM EDT
BTW, Remember to Soak the Rich
Robert Reich reminds President Obama to stand firm on taxing the rich: Demand that taxes be raised on the wealthy to ensure that all Americans get affordable health care. At the rate health care costs are rising, not even a real public option will hold down costs enough to make health care affordab... [Read More]
June 18, 2009 - 10:41 AM EDT
When It Comes to a VAT, Never Say Never
For an idea routinely dismissed as a political nonstarter (most recently by me), the value-added tax sure gets a lot of press. In recent weeks, we've seen articles by VAT fans (like Bruce Bartlett here), VAT foes (like Dan Mitchell and Chris Bergin), and an army of VAT skeptics (Ezra Klein, Tyler C... [Read More]
June 17, 2009 - 8:52 PM EDT
Worth It?
Matthew Yglesias has a great article in the current issue of the The American Prospect arguing that progressives should rediscover the virtues of taxation. Until the 1970s, he says, most Americans considered taxes a necessary evil. But over the last thirty years, egged on by conservative political... [Read More]
June 16, 2009 - 3:06 PM EDT
When Health Wonks Do Tax Policy
Paying for healthcare reform was never going to be easy. The Obama Administration has tried to finesse the issue, using tax hikes on the few to finance healthcare for the many. Congress has kicked in a few other ideas, including limits on the health benefits exclusion (good idea) and a basket of si... [Read More]
June 3, 2009 - 9:05 AM EDT
Soda Drinkers: They're Fat So They Deserve It
The New York Times has joined the chorus calling for a new tax on sugary soda. The editors offer a variegated argument that nicely demonstrates the incoherence of this idea. The soda tax, they say, would help discourage consumption of unhealthy drinks: The idea is that taxes worked to lower tobacco... [Read More]
May 22, 2009 - 1:19 PM EDT
Congress Gets (Sorta) Serious About Health Care Taxes
Apparently, Congress is warming to the idea of taxing employer-provided health benefits. Thank goodness for small miracles: it was starting to look like lawmakers would never find a tax they could swallow. (Except maybe the soda tax. Ba dum dum.) Still, I'm dubious about the prospects for this idea... [Read More]
May 15, 2009 - 12:24 PM EDT
Experts and Inequality
In a recent article for the American Prospect, executive editor Mark Schmitt considers the role of experts in American politics. Specifically, he mulls President John F. Kennedy’s penchant for technocratic governance. Like many before him, he judges it a mixed blessing. Some of Kennedy’s most not... [Read More]
April 28, 2009 - 5:02 PM EDT
Tax Tricks to Save Newspapers
The plight of America's newspapers is not exactly news. In recent years (and especially over the past 18 months or so), there has been plenty of hand-wringing about the dismal prospects of ink-on-paper publications. And not without reason. Ad revenues are plummeting, subscribers are vanishing, and... [Read More]
April 20, 2009 - 11:19 AM EDT
Sometimes a Fig Leaf Is Just Too Small
Washington Post: President Obama plans to convene his Cabinet for the first time today, and he will order its members to identify a combined $100 million in budget cuts over the next 90 days, according to a senior administration official. Seriously? No joke? Look, I'm all for political pragmatism,... [Read More]
April 14, 2009 - 3:05 PM EDT
The Boston Tea Party Was NOT a Tax Revolt
The Tea Party protests planned for tomorrow are ridiculous for any number of reasons. But what's particularly galling -- at least to my historian's eye -- is their historical illiteracy. The Boston Tea Party, from which these modern day revolters ostensibly draw their inspiration, was not a tax rev... [Read More]
April 13, 2009 - 2:20 PM EDT
Tax Reform is Nice, But ...
My colleague Marty Sullivan seems more than a little dubious about the prospects for a value-added tax. And he may be right. A VAT would mark a sea change in the history of American public finance—the kind of tax innovation that only comes along every century or so. But I’m not convinced that old... [Read More]
April 7, 2009 - 6:00 PM EDT
Soak the Middle Class
Wunderkind blogger Matthew Yglesias thinks progressive taxes just aren’t all that. Other countries typically use regressive taxes – like the value-added tax – to pay for progressive spending. On balance it’s a good deal, leveling the playing field more effectively than progressive taxation alon... [Read More]
April 2, 2009 - 4:21 PM EDT
Is It Time Yet?
If you're worried about missing the April 15 deadline for filing your tax return, consider this: if it were 1954, you'd already be two weeks late. From 1919 to 1954, returns (like this one) were due on March 15. From 1913 to 1918, they were due earlier still, on March 1. Congress extended the deadl... [Read More]
April 1, 2009 - 11:02 AM EDT
I Hear She Has an Unpaid Parking Ticket, Too
Kansas Governor Kathleen Sebelius, Obama's nominee to head the Department of Health and Human Services, paid nearly $8,000 in back taxes and accrued interest after discovering errors in her tax returns for 2005, 2006, and 2007. Oops. So far, Democratic leaders have been notably silent on this lates... [Read More]