Tax Analysts Blog

The Importance of Experts

Posted on Sep 9, 2009

Bruce Bartlett, now blogging at Capital Gains and Games, thinks the healthcare debate suffers from a lack of thoughtful, dispassionate, expert advice. Sure, the Capitol echoes with the opinions of healthcare experts, self-appointed and otherwise. But the Obama administration has failed to provide a solid intellectual foundation for the reform effort. "There was never a study from the Department of Health and Human Services laying out the options," Bruce points out, "discussing the pros and cons of various alternatives, or with the sort of reference data that is essential for developing really big policy changes."

By way of contrast, Bartlett points to the 1986 tax reform (as does Gene Steuerle in his recent contribution to the Tax Analysts book, Toward Tax Reform). In late 1984, the Treasury produced a three-volume study of tax reform. This report became a touchstone for reformers across the political spectrum, easing the process of crafting a workable compromise.

    One of the benefits of such a study, which would have greatly assisted the health reform debate, is that it forces the staff managing the reform effort to think it through systematically. Thus before the tax reform proposal ever went to Congress in 1985, Treasury already knew all the potential problem areas, which provisions were expendable and which ones were not. Consequently, Treasury was able to manage the inevitable trade-offs necessary to get a bill enacted without sacrificing the basic goal.
I think Bruce and Gene are right about the importance of expert guidance and scientific knowledge in the formulation of public policy. Ideas are not simply a starting point for reform -- they also provide a road map and compass for lawmakers navigating the political process.

Let me offer another example to bolster the case: the fiscal watershed of World War II. It's often been said (by me, among others) that our modern tax regime was forged in the crucible of war. But it's important to remember that the durable tax reforms enacted during the war -- especially the creation of a modern, broad-based, progressive income tax -- were not simply the product of exigent circumstance. Rather, the broad outlines of this tax regime had been laid out more than a decade earlier, when experts in the Roosevelt Treasury produced a series of multi-volume reports on fundamental tax reform. These reports shaped the process of wartime revenue reform, informing not simply the decisions of the Roosevelt Administration, but those of congressional tax writers, too.

Once upon a time, almost all bureaucratic expertise on taxation was housed in the Treasury Department. Since the 1940s, the Joint Committee on Taxation has provided Congress with an independent source of guidance and advice. (The JCT was established in the late 1920s, but it took more than a decade for to emerge from Treasury's shadow). More recently, policymakers have vested a lot of faith in special commissions and committees, like the tax reform advisory panel appointed by President Bush a few years back. That group dutifully offered a useful blueprint for meaningful tax reform, and after some gracious words of thanks, the White House promptly shelved it.

Will the efforts of the current tax commission headed by Paul Volcker meet the same fate? At this point, it's hard to tell, given its low profile. But if tax reform is ever going to stand a chance, policymakers better start taking ideas seriously -- and exploring them systematically.

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