Ed­i­tor’s let­ter

The Week (US) - - 3 - Wil­liam Falk

Do you pay your fair share of taxes? Un­less your name is War­ren Buf­fett, you prob­a­bly feel quite cer­tain that you pay more than your fair share, to make up for the un­de­served tax breaks en­joyed by some other cos­seted group—the rich, the 47 per­cent, cor­po­rate “fat cats,” wel­fare “mooches.” (Take your pick.) By de­sign, our tax code is in­com­pre­hen­si­bly byzan­tine, filled with loop­holes, tax cred­its, and ex­emp­tions. The abil­ity to ma­nip­u­late who pays more and who pays less is Congress’s great­est power, Kather­ine Mangu-Ward pointed out this week in The New York Times. “Politi­cians use the tax code to re­ward their friends [and] pun­ish their en­e­mies,” she said. Congress is back at that game, with a ma­jor over­haul that dra­mat­i­cally cuts taxes for cor­po­ra­tions, busi­nesses, and heirs of multi-mil­lion­aires, and pun­ishes blue states, up­per-mid­dle-class home­own­ers, the real es­tate in­dus­try, peo­ple with huge med­i­cal ex­penses, even adop­tive par­ents. (See Talk­ing Points and Best Busi­ness Col­umns.) The tril­lions in busi­ness tax cuts will also be fi­nanced partly by bor­row­ing money, push­ing an­nual deficits from this year’s $666 bil­lion to more than $800 bil­lion next year and $1 tril­lion by 2021.

When Pres­i­dent Rea­gan signed the last ma­jor tax over­haul in 1986, it was en­thu­si­as­ti­cally sup­ported by both par­ties. (See Brief­ing.) That re­form bill was also de­signed to be rev­enue neu­tral, and paid for cut­ting top in­di­vid­ual rates by rais­ing cap­i­tal gains taxes and elim­i­nat­ing many cor­po­rate loop­holes and de­duc­tions. None of this is imag­in­able to­day: Bi­par­ti­san co­op­er­a­tion. Democrats agree­ing to cut tax rates on the wealthy. Repub­li­cans agree­ing to in­crease some taxes on busi­nesses and in­vestors. Fis­cal san­ity. In our far more po­lar­ized era, tax pol­icy—like health-care pol­icy, and ev­ery­thing Wash­ing­ton does—is sim­ply par­ti­san war­fare. When the po­lit­i­cal in­fight­ing is over, you can be sure of this: The tax sys­tem will be no sim­pler. Will it be fairer? If you’re a win­ner. Ed­i­tor-in-chief

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