Reforming taxes will not be easier than abolishing Obamacare

TO BRING House Republicans good luck in passing their replacement for the Affordable Care Act, Representative Pete Sessions of Texas wore a brown suit to the chamber, in honour of Ronald Reagan. After the vote was pulled from the House floor, Republicans in Washington moved on to the next big thing, which is tax reform. They may be about to prove again that dressing like the Gipper is easier than governing like him. Though there has long been some bipartisan agreement that both corporate and individual income-tax rates could be cut and loopholes eliminated, Congress has not pulled off a tax reform of the type now being contemplated since 1986. And that one almost failed.

Compared with other rich countries, the most striking thing about tax in America is its complexity. Since that 1986 tax reform the number of carve-outs in the tax code has multiplied, part of a bigger change in the way Congress does business. Where once the passage of bills was smoothed by including federal money for pet projects in congressmen’s districts, tax breaks are now the preferred lubricant. The growth of the federal tax code, which has tripled in length in the past 30 years, is often cited as proof that the country is overtaxed. But its size reflects all those special tax breaks. For individuals, the exemptions turn a tax system whose headline rates are redistributive, by rich-world standards, into one which is not.