Wednesday, January 31, 2018
Victor Fleischer (San Diego) delivers the keynote address on The State of Our Tax Institutions today at the annual USC Tax Institute:
The rules of the game have changed. More than ever, ideology drives tax policy at the expense of evidence, reason, expert advice, or specialized knowledge. This Essay examines the performance of our various tax institutions in the year leading up to the passage of the Tax Cut and Jobs Act of 2017. The state of our tax institutions is not good.
Historically, the tax legislative process—by which I mean not just the formal process, but also the “rules of the game” and the players involved—allowed a variety of institutional players with expert knowledge to influence and shape tax legislation. These institutions include the Congressional tax writing committees, the White House, the Treasury Department, the staff of the Joint Committee on Taxation, think tanks, law firms and accounting firms, lobbyists, academia, and the press. The rules of the game made our tax legislative process more inclusive, pluralistic, and politically independent. In 2017, our traditionally strong tax institutions were largely hamstrung, sidelined, or ignored.
The process that led to the TCJA continues a trend in our political and economic institutions away from a more inclusive, pluralistic model towards a more exclusive, extractive model where the rich and powerful pull up the ladder behind them.