Kleinbard (Law and Business/Univ. of Southern California) orchestrates an encyclopedic, and sometimes eye-opening, introduction to the American tax system's mysteries and secrets, including subsidies and handouts and its relation to the budget process and the economy.
The author, trained in tax law and formerly chief of staff to the Joint Committee on Taxation, delivers an unusually spirited defense of the U.S. government and its power to tax in opposition to the “hatred” expressed by taxation's detractors and the government's opponents, whom he calls “market triumphalists.” He painstakingly documents how roughly $2.5 trillion of taxpayers' money is frittered away each year through subsidies in the form of deductions and credits, as well as through inefficiencies. Kleinbard believes fiscal policy is “applied moral philosophy,” and he believes that a lack of education of children may be the federal government's most serious problem. Without proper education, he fears for the future of the country. Yet local property taxes, which largely finance the education system, cannot provide equal opportunity for all. What he calls the market triumphalists' “pernicious conflation of market freedom and political liberty” impoverishes everyone's understanding of freedom. Mortgage deductions and the employer-based health system, which alone squanders more than $1 trillion per year through subsidies to employers and their insured employees, indirectly fund a massive transfer of resources to the nation's richest. These subsidies do not figure in the legislative process at all, writes the author, and are never discussed as charges borne by all taxpayers. Such “subsurface spending” is buried in the tax code, “amounting to as much as all defense and nondefense discretionary spending.”
Turning Adam Smith against the hypocrisy of free-marketeers is not the least of the strengths of this solid treatment of a potentially existential issue.