Tax Reform with the 20/20 Tax

A debut book offers an exhaustively researched argument for radical tax reform in the U.S.

The U.S. tax code has become a signpost of the nation’s overall political dysfunction: despite popular support for systemic reform, and bipartisan consensus that it’s necessary, there has been no serious attempt since the 1986 Tax Act. And Tanner avers that this piece of legislation actually worsened matters, infusing an already Byzantine tax system with added layers of complexity. Due to its inscrutability, the tax code imposes massive costs of compliance and also discourages work and investment, diminishing the country’s global competitiveness. Tanner, a CPA, presents a painstakingly meticulous case that real tax reform is necessary and possible, and he presents a plan of his own. His proposal, the “20/20” plan, imposes a marginal income tax of about 20 percent on most citizens, a 30 percent burden on wealthier ones, and a 10 percent tax on the least wealthy. Additionally, all tax deductions and tax credits, generally speaking, will redound to the taxpayer’s benefit to the tune of 20 percent. Tanner also furnishes a sweeping reappraisal of income exclusions, deductions, and exemptions, substituting a system of uniform personal tax credits. The author is not dismissive of the political preconditions for such a system to become implemented: he admits it would require the support of the two major parties, something not easily realizable. But he points to the example of Norway, which radically overhauled its own tax system despite a stubborn partisan gridlock. Tanner’s scholarship is a model of relentless rigor and philosophical moderation; he consistently provides the arguments for and against each element of his proposal and openhandedly discusses his own biases. The author also supplies considerable historical context, which helps to clarify the complex subject matter. This is not a simple book, but it would be difficult to imagine the tax code discussed in simpler prose. While not all readers will share Tanner’s optimism regarding the political practicality of his plan, his analysis of the economic issues is compelling. As a bonus, the book includes an appendix that compares the 20/20 plan with the tax reform the House Ways and Means Committee proposed in 2014.

A cleareyed argument for tax reform refreshingly unburdened by political ideology.