A (very) tiny step toward a new tax code

I don't imagine anyone really believes the likes of Orrin Hatch and Max Baucus will give us the type of new tax code the country needs, despite what they say they're going to do. The Wall Street Journal:

Lost amid last week's tumult over Edward Snowden and the Supreme Court was a glimmer of hope for tax reform. The Senate's two main tax writers, Democrat Max Baucus and Republican Orrin Hatch, announced the principle that they are going to rewrite the tax code from scratch and that the supporters of every tax preference will have to justify its continuation. This is the right principle, both as tax policy and reform politics. The goal of tax policy should be to meet the revenue needs of the government with the lowest rate possible and the fewest economic distortions. Starting with a blank slate helps to show how low the rate can be with a tax code unencrusted by the barnacles of the Beltway.

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As a political matter, the tabula rasa principle plays no favorites and forces the Senators on the Finance Committee to judge one tax preference against another and decide which ones matter the most.

If you think these two Beltwayites are going to actually deliver on a new tax code with lower rates and fewer exemptions, well God bless you, but given the current power structure in Washington, this sounds like a process that's going to include lots of high-minded talk and no real change at all. And what we need is not merely "lower rates" and "fewer exemptions." We need to rip the tax code out by the roots and start over. That's what they say they're going to do, but if the process is merely to force supporters of existing exemptions to justify their continuation, do you seriously think their lobbyists will fail to deliver? I do see the potential for something good to come of this, assuming the process even goes this far. If people really have to come up with justifications for every loophole in the tax code, we should be able to see exactly how specious these justifications are. A person who understands the big picture should be able to recognize that the whole thing is about government manipulation of behavior - providing tax breaks for this while imposing confiscatory penalties on that. This matters a lot, because we're entering an age when so many people and institutions are dependent on special tax breaks, it gives the government (in other words, the IRS) disturbing amounts of power to pass judgment on just about everything you do. We've seen of late how well that's working out. I'd like to hear the justifications people offer for these loopholes. I don't think they'll be difficult to destroy on an individual basis, and I don't think the whole system will be difficult to expose as corrupt and designed with the interests of the political class in mind. That said, I have no expectation that Orrin Hatch and Max Baucus will use what they would learn in such a process to replace the current tax code with something that gets rid of all loopholes and institutes something truly better, like the flat tax, the FairTax or the one we still love around here . . . 9-9-9. I guess a baby step is better than no step at all. Probably not much better, though.