Book Report: “The Benefit and the Burden” by Bruce Bartlett

“The Benefit and the Burden"by Bruce Bartlett

There are few ideas in Washington DC that are fundamentally agreed to by all sides of the political spectrum, however whether its (R)Ron Paul, (D) Nancy Pelosi, Lobbyist Grover Norquist, (R) John Boehner, or (D) President Obama just about everyone agrees that TAX REFORM is desperately needed.  Now the devils is always in details but with an understanding on all sides that tax reform is needed, it may make forging a deal after the 2012 elections more possible than ever before. 

Before I discuss the book itself, here is a quick history on the author Bruce Bartlett; I hope you see a trend emerge here.  In the 1970’s Mr. Bartlett worked on the staffs of (R) Congressman Ron Paul, (R) Congressman Jack Kemp and (R) Senator Roger Jepsen.  In the 1980 Mr. Bartlett continued to work for (R) Senator Roger Jepsen till 1984 when he briefly a Vice President of a Polyconomics, a consulting company. However Mr. Bartlett left Polyconomics in 1985 to become a senior member of the Heritage Foundation where he focused on the 1986 tax reform debate.  In 1987 Mr. Bartlett worked in the (R) President Reagan’s White House as a senior policy analyst, In 1988 became deputy assistant secretary for economic policy at the Treasury Department where he served until the end of (R) George H. W. Bush’s administration ended. From 1993-2005 Mr. Bartlett was affiliated with the National Center for Policy Analysis (NCPA), a free market think tank.  However Mr. Bartlett was fired by the NCPA in 2005 for his outspoken criticism of the (R) President George W. Bush administration.   Since 2005 Mr. Bartlett has gotten attention for repeated criticisms of President G.W. Bush and his policies:

“Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting."

Thanks again Wikipedia! So, this book was not written by some liberal, quasi socialist lefty.  Bruce Bartlett is a Republican from the “old school”, and like many “old school” Republicans Mr. Bartlett is worried about the direction in which this new “tea party” Republican ideal is leading America. 

So you know a bit about the man…but what about the book?  I know this sounds crazy but despite being a book about tax reform (…zzz…zzz….zzz) the book is an OUTSTANDING read.  Mr. Bartlett does an great job of following a linear thought process, which makes understanding complex economic issues much more palatable to those (me) who aren’t economic gurus.  The book is broken down into 3 basic sections: The Basics, Some Problems, and The Future.  What I said in my last book review holds true to this book as well, there is simply too much information in this little book to unpack on my blog but I will give you some highlights from each section two wet your appetite a bit.   

The Basics:

Mr. Bartlett starts all the way back in the 1700’s and provides the history of why and how our tax system came into law.  From tariffs and income taxes, to Supreme Court rulings and constitutional amendments, I think you would be surprised just how we got the system we currently have.  In this opening section, Mr. Bartlett also explains the process by which tax law was “traditionally” created, introduced, and eventually passed.  A process which included not just the House Ways and Means Committee but also testimony from tax experts, input from the Office of Tax Policy, and the Joint Committee on Taxation.   Now of this may sound very dull…tax committees and tax experts testimony… but it served as a critical piece to the legislative process to ensure our proposed tax law was created on sound economic theory.  Unfortunately that “traditional” process is contrasted in the book with the current process which I can only describe as a bastardization.  The current process does not listen to expert testimony, does not allow “mark ups” (debates, amendments, rewrites) on bills, and leads to many votes on tax law in which Congress people have not read the bill they are voting on. 

Mr. Bartlett continues in “the basics” to explain the differences between marginal tax rates and effective tax rates, dynamic scoring and static scoring, and finally how our tax system compares with other countries… Not just in regards to how much to tax, but also WHAT we tax.  Should we tax income or tax consumption?  In this first section Mr. Bartlett tackles much more as well as: tax progressivity, growth, and healthcare all this just the give you the basics!

Some Problems:

Mr. Bartlett titled this section appropriately…”some problems”.  Mr. Bartlett is not trying to point out every problem that he sees in the tax code but rather some big problems or obstacles he sees to getting tax reform accomplished.  The items Mr. Bartlett points out in the book are not minor speed bumps on the way to tax reform but rather massive brick walls which may take some pain to break through.  Problems like healthcare, tax deductions, housing, and capital gains. The rhetoric and hyperbole around all these issues is so heated that it almost drowns out any pragmatic debate that might led to a real solution. Unfortunately in today’s political landscape, rigid idealism and unwillingness to compromise is actually seen as a virtue, in some circles.  For tax reform to have any real chance, “compromise” can not be seen as a dirty word anymore.  Mr. Bartlett address even more than I laid out here from corporations, abuse of the charitable deduction, to the IRS and the effectiveness of tax collections.  If you want to know what is standing in the way of true tax reform pick up this book and start reading. 

The Future:
Mr. Bartlett finally gives the reader some solutions to the all the problems we have read up until this point.  He addresses how tax reform has been done in the past and how that should be used as a blueprint for reform going forward. He also address plans for reform that have already been put out whether it be a “flat tax” (which he explains is NOT really flat) the “Fair tax” which would eliminate the income tax altogether, and there was even talk of Herman Cain’s 9-9-9 Plan.  However the underlying theme which continues throughout this entire last section of the book is INCREASING REVENUE! Mr. Bartlett is crystal clear on this point to have any chance at balancing the budget the federal government will have to increase its revenues.  Whether the federal government increases revenues through the adoption of a VAT (Value Added Tax) or simply the expiration of the Bush Tax cuts he is insistent that you can not responsibly cut spending enough to reach a balanced budget. 

Lastly to my great personal satisfaction Mr. Bartlett takes Grover Norquist (a tax lobbyist and head of Americans for Tax Reform (ATR), by name, to task in this final section of the book.  I have seen Grover Norquist speak in television interviews on multiple occasions spouting his devout belief that taxes should NEVER EVER be raised UNDER ANY circumstances.  I always end up disappointed that no one successfully challenges his position.  Well, Mr. Bartlett takes care of that and then some in this book, successfully refuting many of Mr. Norquist popular “talking points.” I took great pleasure reading this particular section:

“One would think that an organization allegedly dedicated to tax reform, such as Americans for Tax Reform, would be vigilant about opposing the inclusion of new tax loopholes in the tax codes.  But ATR NEVER opposes any tax reduction measure, no matter how narrowly focused the benefits are, not matter how closely it resembles pure spending.  When I asked ATR’s Ryan Ellis if he could name ONE loophole that ATR had ever opposed, he could not. “

With tax reform battles on the horizon, why not grab a book that will give you the foundations needed to make an informed decision on what is best for you and your country?