Why Tax Reform Flounders: The Case Of Doubling The Standard Deduction

This post originally appeared on TaxVox.

Do you want to know why tax reform is so hard? Consider one seemingly simple idea that has been floated by President Trump and congressional Republicans in their Unified Framework: roughly doubling the standard deduction. The closer you look at this proposal, the more you see how complicated it is.

Is doubling the standard deduction a good idea? Well, maybe. By granting more taxpayers a larger reduction in taxable income without making them itemize a list of specific deductible expenses, boosting the standard deduction can substantially simplify the tax filing process. It would also reduce taxes for some middle-income households. But…

It costs money. The Framework would partially offset the expense by eliminating the personal exemption. But…

Exchanging a larger standard deduction for repeal of the personal exemption raises the relative burden of taxes on households with children. But…

The Framework attempts to offset the elimination of personal exemption with a bigger child credit. That might help reduce some of the higher taxes caused by repealing the personal exemption. But…

These adjustments cost revenue and so would reduce the amount of rate reduction that Congress can pay for. And…

The share of households (including nonfilers) that itemize with the larger proposed standard deduction would be reduced, perhaps to as little as 5 percent, depending upon what happens to specific deductions. But…

If Congress reduces the number of itemizers, it would also reduce the number of people who’d take deductions for charitable giving, home mortgage interest, and state and local taxes paid. That, in turn, has charities, homebuilders, and state and local government officials worried. And…

Retaining tax incentives only for the highest income households makes zero sense for provisions meant to encourage families to own homes or give to charity. But…

Congress could create alternative subsidies for charitable donors, homebuilders, and state and local governments. But…

That could cost more foregone revenue and reduce the size of any tax rate reduction that could be paid for. And, whoops…

So far, we’ve pretty much forgotten about the poor and moderate-income taxpayers who would benefit little or not at all by an increase in the standard deduction. But…

To help them requires yet more money and reduces the amount of rate reduction that can be financed in a tax reform package. And, thus,

Each decision on each individual change not only causes new interactions affecting the amount of revenue other provisions in a bill would gain or lose, but…

It alters the distribution of winners and losers among individuals and industries that also must be addressed. And…

These are only some of the effects of one simple reform Now, think of what Congress and the President must tackle in a bill that revises the taxation of capital and labor, multinational corporations and partnerships, pensions and insurance. And…

You will get some inkling of why, as the president might say, “nobody knew” tax reform would be so hard.


Come The Flood, Who Should Pay To Help?

This post originally appeared on TaxVox.

Hurricane Harvey’s historic flooding has brought out the best in many people. They have put their lives in danger to save strangers, shared their food, and offered their homes. Citizens across the country are contributing to the United Way, Red Cross, community foundations, and churches. Race, creed, and social status seem to make little difference, and the political issues that divide us suddenly seem petty, almost separated from the real world in which we live, suffer, or thrive.

But because charities and individuals can do only so much, we have turned to government to act on our behalf. But even as we ask government to coordinate efforts and bear a large share of the cost of repair and rejuvenation, a question lingers: Who should pay for those costs? Or to ask another way, who should feel entitled to claim they are exempt from the social compact that says we should use our tax dollars to assist victims of an historic flood they could not predict or plan for? Once one broadens this question to include helping victims of poverty or poor health, or paying some share of the cost of our national defense, it lays bare the issue of who should pay taxes.

Join me, therefore, in speculating about who should be exempt from sharing in the tax burden for helping victims of Hurricane Harvey.

How about owners of capital? They claim they benefit society by building and holding onto wealth and promoting growth by investing that wealth. Though often exaggerated, their case has enough merit to support economic and legal arguments for converting the income tax to a tax on consumption. Indeed, our current tax system combines features of both and reflects the divisions over the role of savings and investment in enhancing our well-being.

Many owners of capital even claim they should pay “negative” tax rates, at least on returns from new investments through generous tax depreciation or expensing of debt-financed physical assets. Should the tax system exempt owners of capital who consume only modest portions of their income from helping to finance assistance for the victims of Harvey?

How about the poor? We exempt low-income households from income tax (though the poor often pay sales, excise, and payroll taxes), a choice that also has some merit. After all, how can one expect the poor to pay taxes when they can’t afford adequate food or housing? Of course, that issue is complicated because low-income people often receive more in government support than they pay in taxes.

How about the middle class? We’re running huge federal deficits today largely because no one wants to raise their taxes or cut their benefits. Democrats are willing to tax the rich and Republicans will take away benefits from the poor, but both parties appear to coddle the (very large) middle class. It is true that middle-income workers have seen little wage growth or upward mobility in recent years, but does that mean they should not do their part to help government cover the costs of floods or other public goods and services that otherwise would add to deficits?

How about the elderly? Yes, many are retired and on fixed incomes. But many are reasonably well off and enjoy a permanent tax exemption on income from sources such as Roth retirement accounts. Can we as a nation go back on that deal? How about those who die with large estates? They could have realized income by selling assets and consumed that wealth when alive. But if they did not, should they be subject to an estate tax upon death? How about companies that get special business tax breaks? Don’t they need tax help to ensure their competitiveness with firms in other countries?

And, finally, how about you and me? Why should we have to pay taxes when it appears almost nobody else does? But then there are those people suffering in the wake of Hurricane Harvey.


Tax Reform: Start with the Fundamentals

This post originally appeared on TaxVox.

For the umpteenth time, Congress and the Trump Administration are going back to the tax reform drawing board, just as they have had to do for health reform. These policymakers could help themselves by recognizing that you can’t go back to a place you’ve never been.

Many policymakers look to the Tax Reform Act of 1986 as a model for successful reform, but largely ignore its lessons. Here is one of the most important: the success of the ’86 act was built on a solid core—a set of fundamental principles accepted by conservatives and liberals alike. They included equal justice for those in equal circumstances, simplicity, and–to a large extent–efficiency.

Agreeing on that core made it possible for reformers of all stripes to first address issues of common concern before turning to more conflict-laden issues, such as the taxation of capital income. While the political process of passing the ’86 act bent those principles, it never broke them. And the result was the only comprehensive revenue-neutral reform in the hundred-year history of the income tax.

Don’t get me wrong, 2017 is not a replay of 1986. Heraclitus was right: you can’t step into the same stream twice. But you can learn from previous crossings.

To start, it’s a myth that there was more friendly cooperation in the mid-1980s. Indeed, political war raged both within and between political parties.

Democrats were smarting over their electoral losses while Republicans fought over whether President Reagan was “being Reagan” whenever he did something one faction disliked.

Within the Treasury Department, extreme supply-siders who held that tax cuts paid for themselves fought with those who favored cleaning up the tax code rather than simply giving away money through tax cuts. Even some reformers questioned whether they should spend time on a tax reform study commissioned by President Reagan, which was largely viewed as an attempt to avoid debating tax issues during the 1984 presidential campaign.

In early 1984 when I became the economic coordinator of Treasury’s tax reform study, people in the Office of Tax Analysis were struggling over how to start. Should we focus on consumption taxes or income taxes? Should the Administration consider an add-on value added tax to finance a smaller income tax? Should we aim for a modest bill or the more comprehensive plan the Administration eventually championed? Should we expand tax breaks for business investment or pare them down to finance lower rates?

Sound familiar?

As an initial step, I encouraged Treasury staff to divide the overall reform effort into about twenty modules, each covering dozens of specific tax code provisions. Almost everything was on the table: pensions; housing; health; treatment of marriage, children, and the elderly; tax shelters; capital gains; depreciation; and international taxation, to mention only a few. We prepared briefs for Treasury Secretary Donald Regan on how to reform each area, and asked him to keep an open mind about politically difficult choices at this early stage and leave compromises of the principled tax reform options to later political bargaining.

To establish a solid core of reforms, we first dealt with items that would be common among an ideal income or consumption tax, except for taxation of capital income. While we aimed for roughly the same level of progressivity for the overall tax system as the then-current tax code, we did not focus on the progressivity of each particular provision. We recommended killing an inefficient subsidy favoring low- or middle-income taxpayers since on average we could hold those households harmless by reducing their tax rates.

Today’s reformers would benefit by creating a similar core on which to build reform. For example, defenders of the status quo would have a harder time making their case if reformers can show that a new tax system would increase charitable giving, support home ownership, make education more accessible, or protect retirees without losing as much tax revenue as the current system.

Similarly, they could simplify multiple higher education subsidies, capital gains taxation, and various definitions of a “child.” They could reduce penalties on marriage and on some families with children. And they could curb tax-driven investments without constraining economic decisions.

Contrast this approach with the flailing so far, where elected officials began by proclaiming support for cutting taxes on corporations and then, by extension, partnerships and the middle class. At best that’s like announcing a low purchase price for both new luxury and middle-income condos before ever designing the building housing them. Lawmakers would have much more success by first carefully creating a solid foundation for tax reform and then building out the new reforms.


Tax Reform Isn’t Just About Revenue but Health Insurance, Housing, and More

This post originally appeared on TaxVox.

Taxes aren’t just about raising money for government. Policymakers engaging in tax reform must recognize how their decisions can disrupt markets for a wide range of economic activity, including healthcare, housing, and charitable giving. Some of those behavioral reactions may be secondary and unintended, but they can’t be ignored.

The Tax Policy Center has described some of the potential impacts of President Trump’s tax ideas on charitable giving and in the way businesses organize themselves. But it’s worth looking at two other examples—health insurance and homeownership—to see how tax changes can affect economic behavior. In both examples, tax reform can improve efficiency and equity, but only if it is well designed.

Employer-provided Health Insurance.

In a recent press conference, Treasury Secretary Steven Mnunchin and Director of the National Economic Council Gary Cohn implied that Trump’s tax plan could limit existing tax breaks for employer-sponsored health insurance (ESI). It would be one of a long list of tax preferences that Administration may target.

But any significant cut in subsidies for ESI could lead employers to reduce or even eliminate health insurance as part of employee compensation. The effects of such a decision could be substantial and most likely change the way people get health insurance. Tax reform must be designed with regard to its effects on subsidies offered through the Affordable Care Act or the House’s recently passed replacement.

For many years, health policy experts have suggested replacing the ESI exclusion with a tax credit. But the ACA and the House bill, and their related costs, largely depend upon retaining the ESI exclusion while adding subsides for those who buy outside the employer market.

The ACA’s exchange subsidy is larger for many employees than the value of their exclusion. Thus, employers already have some incentive to drop ESI coverage, send employees to an exchange, and share the net savings. Yet, so far, few have done so in part due to uncertainty about the future of the ACA and the reluctance of managers to give up their existing coverage. It is not clear how employers would respond to tax reform under the ACA or the House’s credits, which are less generous but in some cases more flexible.

Tax Subsidies for Housing

Although Cohn insists that “homeownership would be protected” under Trump’s tax plan, the Administration is considering several proposals that would significantly reduce incentives to buy housing.

Here are just three examples: Lowering tax rates would make the mortgage interest deduction less valuable. Eliminating property tax deductions as part of a repeal of the state and local tax deduction could raise taxes for homeowners who itemize. And doubling the standard deduction would significantly reduce the number of taxpayers taking deductions for mortgage interest.

In this new world, renters would increase in numbers and the number of homeowners would decline.

Like the exclusion for employer-provided health insurance, the tax subsidies for homeownership are both inefficient and inequitable. They provide an incentive mainly to those who need it least because the benefits are concentrated among those with higher incomes.

While it might make sense as a matter of tax policy to give middle-income individuals a higher standard deduction in lieu of the opportunity to itemize expenses, does it make sense as a matter of housing policy to leave a mortgage interest deduction concentrated on a select few taxpayers, largely with incomes well above average? And to what extent should equity owners, who still maintain an incentive to own homes, as opposed to taking out their equity and putting it into a saving account, be favored relative to borrowers? After all, younger and wealth-constrained, households are the ones most in need of borrowed funds to own their first homes, and they already have a far smaller share of total societal wealth than they did a generation ago

Providing some alternative incentive, such as to new homeowners, might help address some of these housing policy issues.

My concerns are not intended to throw cold water on tax reform. But they are a warning about the importance of doing it right.

Tax subsidies for health insurance and homeownership do need reform, but policymakers must ask themselves whether their new tax system creates the right set of incentives for the right people and integrates well with spending programs aimed at the some of the same objectives. They must also be sure to adjust as necessary to avoid undesirable behavioral responses. If they don’t, they may weaken or even destroy the benefits of reform.


A Debt Straightjacket or a Misdiagnosed Disease?

Noting rising public and private debt across the developed world, International Economy magazine recently asked a group of economists, including me, “Has the world been fitted with a debt straightjacket?” Below is the response I gave. You can see the full range of responses given by others here (PDF)

A straightjacket, yes, but debt defines its features poorly. Debt is merely one symptom of a disease that has vastly restricted the ability of developed nations to respond to new needs, emergencies, opportunities, and voter interests. The disease: the extraordinary degree to which past policymakers have attempted to control the future—building automatic growth or growing public expectations into existing spending and tax subsidy programs while refusing to collect the corresponding revenues required to pay for them.

In Dead Men Ruling I show how this leads to a “decline in fiscal democracy”—the sense by officials and voters alike that they have lost control over their fiscal destiny. Though the degree and nature of the problem varies by type of government and culture, research so far in the U.S. and Germany, two countries with greater fiscal space than most other developed countries, confirms this historic shift.

We must understand how we got here if we ever expect to get a cure, since defining the problem by the debt symptom has led mainly to periodic deficit cutting that leaves the same long-term bind, frustrating voters and officials alike while increasing the appeal of anarchists and populists.

For most of history, nations with even modest economic growth wore no long-term fiscal straightjacket. Even with the debt levels left at the end of World War II, economic growth led to rising revenues, while most spending grew only through newly legislated programs or features added to programs. Typically existing programs were expected to decline in cost, e.g., as a defense need was met or construction was completed. Until recent decades budget offices did no long-term projection, but if they had, they would have revealed massive future surpluses over time even when a current year revealed an excessive deficit. Year-after-year profligacy was still a danger, but it wasn’t built into what in the U.S. is referred to as “current law.”

Today, rising spending expectations are built into the law through features such as retirement benefits that rise with wages, expectations that health care spending will automatically pay for new innovations, and failure to adjust for declining birth rates and the corresponding hit on spending, employment and revenues. At the same time, officials fail to raise the revenues required to meet, much less fund, those laws or voter expectations.

A rising debt level relative to GDP is merely one symptom. Reduced ability to respond to the next recession or emergency is another, while the increasing share of government spending on consumption and interest crimps programs oriented toward work, investment, saving, human capital formation, and mobility.

Politically the chief budget job of elected officials turns from give-aways to avoid growing surpluses to take-aways that renege on what the public believes is promised to them. Economic populists, fiscal hawks and doves alike, don’t help when their fights over short-run austerity ignore the fundamental long-term disease.

The bottom line: flexibility, not merely sustainable debt, is required for any institution—business, household, or government—to thrive.


The Trump Administration Dilemma on Tax Reform

This post originally appeared on TaxVox.

Q: Since the modern federal income tax was created in 1913, how often has Congress enacted a revenue-neutral income tax reform that significantly expanded the tax base and lowered rates??

A: One. In 1986.

It is no wonder that the Trump administration—like others before it—is struggling with broad and systemic tax reform. To better understand why, think of tax legislation in three distinct flavors: tax cuts, tax increases, and revenue-neutral changes.

Most income tax bills cut taxes. The reason is obvious. Elected officials like to give something to voters rather than take something away from them.

Since the large tax increases required to finance World War II, most revenue bills reduced taxes, particularly in the period up through 1981. Significant reductions in defense spending as a share of the economy, along with inflationary increases in incomes that pushed people to pay higher individual income tax rates, made legislated tax cuts possible during what I call the Era of Easy Finance.

In a few cases, Congress did raise income taxes. Tax historians Joseph Thorndike and Elliott Brownlee have shown that almost all major income tax increases came about as a result of war. Others, generally raising annual revenues by well less than 1 percent of GDP, have been enacted, for instance, as part of several deficit reduction agreements between 1982 and 1997.

Broad-based and systemic income tax reform that keeps revenues roughly the same as current law requires a tremendous amount of work, largely because it means broadening the tax base by identifying which popular tax subsidies, now costing more than $1 trillion annually, should be targeted for elimination.

Less broad-based but still systemic reforms are also possible. Outstanding modern examples are the codification effort of 1954 and the 1969 reform best known for addressing tax issues surrounding foundations and charities.

As economic coordinator of the Treasury’s 1984 study that led to the Tax Reform Act of 1986, I remember how difficult it was for Treasury and Joint Committee on Taxation staffs to draft legislation and to estimate cost and distributional effects for those proposals. Increasing taxes on some to pay for tax cuts for others requires tax writers to agree on principles to guide and justify their actions. The political aspects of tax reform, building a political coalition to push to see these principles enacted, are even more difficult than the technical concerns.

Tax reform of the revenue-neutral variety is much harder than merely cutting taxes. To cut taxes, lawmakers simply tally a set of wants, perhaps pare them down to fit within a specified amount, and leave the financing bill for current tax cuts to future generations of unidentified taxpayers.

Finally, the design of any systemic reform must acknowledge the economic and political environment of its time. The 1986 Act, for instance, took advantage of bipartisan concerns over tax shelters, President Reagan’s focus on high tax rates, Democrats’ objections to the rising income taxation of the poor, and social conservatives’ efforts to reverse the rising burden being placed on families with children. Deficits were perceived to be a problem, though a smaller one than today in part because Congress had raised taxes and cut spending in the 1982 and 1984 budget agreements and in the Social Security Act of 1983.

President Trump and his team have promised to cut tax rates for all businesses and for the middle class, while not increasing the deficit. They can’t get there by taxing the poor. Even if they assume greater economic growth, it’s not going to be enough to pay for the historically large tax cut provisions. So what’s left?

Some seem to want simply to throw in the towel on revenue neutral tax reform and just cut taxes instead. But $1.3 trillion in additional spending is already built in for 2026 (largely due to rising interest costs and increased spending on Social Security, Medicare, and Medicaid). This is far more than the $850 billion in additional taxes projected to be collected for that year due to a growing economy. How will Congress and the president cover that existing shortfall, even before they think of more tax cuts?

That’s the box the Administration is in. And it is why tax reform is no easier than health care reform. Avoiding big new revenue losses requires systemic reform, such as increasing taxes on individuals to offset business tax cuts. Or engaging in true budget reform that includes scaling back on popular programs. Those are the requirements of our time, like them or not, and while briefly they might be ignored politically, over the longer run they can’t be dodged as a matter of either economics or arithmetic.


How Both Public Tax Reform and Private Sector Initiatives Can Strengthen Charities

This post originally appeared in TaxVox.

In the March and April 2017 print editions of the Chronicle of Philanthropy, I proposed both a public and a private sector initiative for strengthening charities. These included improved tax policies as well as steps charities could take independently of any legislation. These initiatives aim to increase charitable giving of income, wealth, and time.

My organizing principle was simple: First, make tax subsidies more effective and efficient. Second, improve the way charities market themselves. Neither Congress nor the charitable sector has ever approached either task in a comprehensive way. The articles are here and here, with permission of the Chronicle.

Here, briefly, are my suggestions:

What government can do:

  • Allow all taxpayers—even current non-itemizers—to claim a deduction for contributions above some minimum amount.
  • Extend the deduction to gifts made by April 15 or filing of one’s tax return—similar to the extended contribution date for Individual Retirement Account contributions– rather than December 31 of the previous calendar year.
  • Create a better donation-reporting system to IRS to reduce tax non-compliance, with a reward of an extra deduction for those donations; the improved tax compliance should more than pay for the extra reward.
  • Make it easier for individuals to make donations from their IRA accounts.
  • Reduce and simplify the excise tax on foundations.
  • Encourage charitable bequests, especially if the estate tax is cut or repealed.

What charities can do, independently from government:

  • Create a national campaign to promote giving, such as:
    • Tell simple but powerful human-interest stories extolling generous people.
    • Help donors identify worthy programs by promoting access to useful sources of information on each charity.
    • Encourage people to give to charity when they settle disputes.
  • Help people understand better their potential to give out of wealth, not just income, and to leave lasting legacies:
    • Run endowment campaigns.
    • Encourage wealth advisers to promote charitable giving.

Today charities feel under siege. They fear they are about to lose direct government support if Congress cuts domestic spending that funds the specific programs they run. And they worry that lawmakers will trim tax benefits for charitable giving by individuals and firms. Their concerns are legitimate but, in truth, over the many decades I have worked with charities on public policy issues, their advocacy has nearly always felt defensive.

Charities can easily become collateral damage from policies that are not aimed directly at them. Congress won’t decide broad issues such as size of government, tax rates, limits on tax incentives, or the share of revenues that should come from income taxes (the only tax where there is a charitable deduction) solely or primarily based on their effect on the charitable sector.

Thus charities must think longer-term as the nation is struggles to define a modern set of public policies and societal goals relevant to 21st century needs and opportunities. My suggestions are intended to extend well beyond any current political battle, no matter which party controls government at any point. Their goal is to strengthen the charitable sector, by improving both government incentives and the outreach and self-examination by non-profits themselves.

Fighting to maintain the status quo is not a strategic option. Nor should every charity expect to come out unscathed in this rapidly changing environment. But the US is facing important choices as it decides the direction and size of government in the Trump era. That debate ought to include a broad look at charities in this new environment and whether that includes strengthening, though reforming, the role of charities in American life.


How the Fight over Symbols Prevents Health, Trade, Immigration and Tax Reform

This post originally appeared on TaxVox. 

President Trump came into office promising to repeal the Affordable Care Act, abandon key multinational trade agreements, build a wall and send immigrants home, and reform the tax code. Many Democrats have sworn to oppose him at every turn. On the first three items, he has already faced obstacles or stalemate and even temporarily left the battleground. But are these debates really about substantive reform that improves people’s lives? Or mainly over capturing symbols that appeal to each party’s base? Those goals aren’t the same.

Reform defies easy party or ideological labels because it often focuses not on bigger or smaller government but fixing poorly-functioning operations, establishing greater equity among households, or adapting to new circumstances. With health, immigration, trade, and tax policy the need for constant real improvement conflicts with important, but often-counterproductive, fights over political symbolism.

Health Reform. When the Affordable Care Act (ACA or Obamacare) passed the Senate, backers knew it had flaws. They hoped to fix them later in the legislative process, but the death of Sen. Ted Kennedy cost Democrats their filibuster-proof majority in the Senate and made the fixes or amendments requiring a new Senate vote virtually impossible. As a result, the healthcare community and households continue to grapple with an imperfect environment: Gains from expanded insurance coverage have been offset by slower than expected take-up rates, especially among young adults, for ACA marketplace policies, ongoing uncertainty about Medicaid expansions, and failure to come to grips with the full impact of health cost growth, often outside of Obamacare, on the federal budget.

Congress and President Trump have a chance to repair those problems, but both parties find themselves in a box. Republicans can’t accept any reforms that allow Democrats to claim “Obamacare” is being preserved, while many Democrats can’t swallow changes that acknowledge the ACA’s failures.

Trade Reform. Trade is another case where political symbolism impedes needed change. No doubt, our trading partners at times violate the spirit and even treaty letter of “fair” trade (so does the US), but trade agreements are the very vehicle for limiting such violations. Rather than repairing these understandings, political symbolism demands they be torn up or abandoned. Thus, instead of reviving and revising the Transpacific Partnership, which might have enhanced US trade in Asia, the Trump Administration has scrapped it.

Any successful trade agreement must strengthen rather than weaken international commerce if it is to promote economic growth without raising consumer prices. But trade debates occur on treacherous political ground. Any shift in trade, no matter how good or bad, almost inevitably reduces demand for some US-made products and hurts the workers producing those goods, thereby creating a new group of populists who will cry “foul” that the President and Congress have once again abandoned workers.

Immigration Reform. People suffering from persecution, hunger, or lack of human rights will try to escape those horrors and find new opportunity. So it has always been and will always be. Borders are porous enough that there are tens of millions of immigrants, legal and illegal, in the United States and much of Europe. Meanwhile, immigrants grow as a share of developed nations’ total populations, partly due to relatively low-birthrates in the existing populations. We can reduce opportunities for legal entry, step up border patrols, build walls, and send even more people back to their prior country of residence. But none of those actions really address the basic economic and social forces at play, while temporary symbolic political victories leave millions of families fearful of breakup, reduce domestic output by immigrant workers, and hurt America’s image as the home of freedom for people around the globe.

Tax Reform. In taxation, the symbolic fights almost always center on the size of government and progressivity. Yet many of the tax code’s real problems are that it is inefficient, complex, and treats those with equal incomes unequally and inequitably. The Tax Reform Act of 1986 neatly focused on the latter issues by making no significant change in either revenues or progressivity. But even in its early stages, the debate over a 2017 tax reform has already been muddled by a cacophony of mutually inconsistent goals: Reduce tax rates for multinational corporations and cut taxes for the middle class while not increasing the deficit or raising anyone’s taxes.

As long as lawmakers fight mainly over symbols rather than substance, they are unlikely to achieve many real improvements in policy. And tax reform will follow along the path down which health, immigration, and trade reform already seem headed.