What a Tangled Web We Weave

...so you can understand the titillation that shimmered through the capital when the local paper announced, a few days after christmas, that President Bush might delay his plan to "simplify" the tax code...

...After the applause had died down, he went on: Andrew Ferguson is a senior editor at THE WEEKLY STANDARD...

...Republicans today may not admit their attachment to a complex tax code, but it's real enough, and it is both philosophical and practical...

...in particular, "the current tax code is a complicated mess—filled with special interest loopholes...

...Republicans no longer disparage "social engineering...

...BY ANDREW FERGUSON DISCOUNTING for an underwater earthquake that sent 40-foot-high waves traveling thousands of miles across the open sea to inflict death and destruction on an unimaginable scale, it was kind of a sleepy holiday for the Washington political community, newswise...

...By closing loopholes—eliminating exemptions, canceling credits—reformers could broaden the pool of taxable income and, in compensation, push marginal income tax rates as low as they could feasibly go...

...For a modernizer, this seems pretty old-fashioned...

...Coincidentally, since 1987, Republicans have also enjoyed the rise of "big government conservatism"—the philosophical lodestar for people who really like living in Washington and working for the government (or having the government work for them) while calling themselves conservatives...

...And two paragraphs after that, he promised to "give workers the security of insurance against major illness...

...Though pushed through by an oddball coalition of New Deal liberals (Dan Rosten-kowski) and Rockefeller Republicans (Robert Packwood) and supply-side tax-cutters (Jack Kemp), the 1986 reform is best understood as a creature of Reaganism...

...There was always something mysterious and unaccounted for about President Bush's pledge to make tax simplification a top item on his agenda...

...Republicans back then claimed to despise what they called "social engineering," and especially the schemes, instituted in the tax laws, designed to force citizens into certain kinds of behavior...

...Oh, and one other thing: "The federal tax code is dysfunctional," says the platform...

...in government as elsewhere, modesty is for chumps...

...And sure enough, the reform that Reagan signed in 1986, for all its idiosyncrasies and concessions, did indeed simplify the tax code...

...Big, important speeches like that need a theme, also known as a "vision for the future," and thus tax reform was presented as part of the president's wide-angle belief that "many of our most fundamental systems . . . were created for the world of yesterday, not tomorrow...

...To a startling extent, it cleansed the federal tax laws of social engineering...

...Really, though, no one should have been surprised...

...Then he promised to encourage the construction of "seven million more affordable homes in the next 10 years," and then he promised to make it easier for everyone to go to college...

...Then he started talking about the war on terror, so no one had a moment to stop and consider that the way in which the president was going to modernize all these systems—the way he was going to do all this attracting and encouraging and security-giving—was by inserting exemptions and credits and deferrals into the tax code...

...The confusion will be particularly acute for those of us who, waving away the mists of senile dementia, recall the federal government's last tax reform in 1986...

...I fished out a copy of the platform the other day...

...Instead of being simple, the current tax system is needlessly complex...

...Bush Expected to Delay Major Tax Overhaul," said the headline in the Washington Post...

...energy...

...In all the excitement generated by the unveiling of so ambitious an agenda (you knew it was ambitious because the commentators kept telling us it was ambitious) a few things were overlooked...

...And the favors, more often than not, are delivered by monkeying around with the tax code...

...At last there was something else to talk about on Inside Politics...

...Tax reform is necessary to achieve the simplicity, efficiency, fairness and predictability that the American people deserve, and to give all Americans the freedom to determine their own spending priorities...

...And two paragraphs after that, he promised to attract new businesses to poor communities by creating "American opportunity zones...

...It was also a long time ago...

...homebuyer's tax credit, increasing the adoption tax credit, increasing the child care tax credit, quadrupling business expensing exemptions, extending tax rules for employer-sponsored retirement plans, creating Lifetime Savings Accounts, instituting Employer Retirement Savings Accounts, adding exemptions for Zero Downpayment Mortgages and nonprofit organizations involved in the Self-Help Homeownership Opportunities program, enacting a Single-Family Affordable Housing Tax Credit, changing rules on expensing for research equipment, enacting health savings accounts, creating new tax incentives for low-premium, high-deductible health-insurance plans for small businesses, extending tax deductibility to insurance premiums associated with the above-mentioned health savings accounts, making the research and development tax credit permanent, reorganizing the Alternative Minimum Tax, implementing the National Energy policy which will create incentives for energy efficiency including providing an investment tax credit for Combined Heat and Power projects, a tax credit for marketing fuel-efficient vehicles like the one all those Hollywood movie stars drive (not the Hummer), a "temporary, efficiency-based income tax credit lasting from 2002 through 2007" for purchasing hybrid fuel cars, tax incentives for private-sector investment in Intelligent Transportation Systems, augmenting the ethanol excise tax exemption, adding "tiers" to the tax credit for new landfill methane projects, extending tax credits for electricity made from wind, extending tax credits for electricity made from biomass including the per-kilowatt hour tax credit for biomass combined with coal-fired electricity, I get paid by the word, offering a "tax credit to help workers if they have lost their jobs due to international trade," instituting a new 15 percent tax credit for residential solar energy projects (but only up to $2,000 per fiscal year, to discourage treehugger greed), enlarging the Internet Access Tax moratorium, supporting the Nuclear Power 2010 program that makes financing for the construction of nuclear power plants tax free, extending credits for use of biodiesel technologies, extending new education savings accounts for use in kindergarten (!) and grade school, if you're still reading this you're probably a Democrat, offering "tax relief" for teachers who get training, establishing tax-free Personal Reemployment Accounts for Americans returning to work, providing tax relief for companies in the 11 govern-ment-credentialed "high growth" industries who participate in the High Growth Job Training Initiative, creating an "above-the-line" tax deduction for premiums of long-term care insurance, adding a personal exemption for an old person under in-home care, revising earning criteria to recalculate the taxation rate of worker's pension payments . . . but I'm tired and I want to stop typing now...

...He first made this pledge in his acceptance speech at the Republican National convention in August last year...

...The ambition of the big-government conservative begins on the very first page, and it goes on and on and on, with calls for: expanding education IRAs for college, making prepaid tuition plans tax-free, creating new deductions for higher education expenses, reinstating the D.C...

...by complicating the tax code, in other words, rather than simplifying it...

...This was the philosophy behind Bush's speech, and behind the 2004 Republican party platform, which offered the president's domestic policy in detail...

...It was a miracle of modesty in government...

...In the proper hands— theirs—government now can be an instrument for advancing whatever ends or interests are considered desirable or lucrative at any given moment...

...Rea-ganism, along with the political party that institutionalized it, is deader than the Dodo, as Bush's acceptance speech, and the rousing reception it received, demonstrated...

...Their ideal instead was a neutral tax code, drained of favoritism and preference, leaving a system that treated all citizens alike...

...Now those K street lobbyists are just as likely to be ex-idealistic Republicans —indeed, often ex-Capitol Hill staffers (or even ex-congressmen) who importune their ex-bosses for special treatment for the clients that pay them lots of money to do that...

...Therefore, he said, "we will transform these systems...

...In a new term, I will lead a bipartisan effort to reform and simplify the federal tax code...

...The president sees himself as a moderniz-er...

...The American people demand nothing less...

...For example, one paragraph before he promised to simplify the tax code, the president had promised to make our country "less dependent on foreign sources of Republicans may not admit their attachment to a complex tax code, but it's real enough, and it is both philosophical and practical...

...In the Reagan years, idealistic Republicans declared war on the K street lobbyists who haunted "Gucci gulch," the marbled hallways adjacent to hearing rooms on capitol Hill, where the hired guns would pressure lawmakers with unsavory requests for favored clients...