The Corner

Politics & Policy

Krauthammer’s Take: Reforming Tax Deductions Would Be a Triumph

Charles Krauthammer argued that Republicans would do well to reform the tax code of its many loopholes and deductions, which benefit the wealthy:

The most important element of this is the stripping away of deductions. In 1986, that was the great triumph of the tax reform, which stripped away all these loopholes and paybacks and cutouts — essentially a form of corruption. And I think the appeal that a Republican can make to Democrats is: This meets the fairness argument. Because it is only the rich, it is the only the powerful, who have the lawyers and accountants who can exploit these cutouts, and anybody else can’t use them. And I think by doing that, you allow the lower rates — that was the genius of the Reagan tax reform.

Except for the mortgage-interest-rate deduction, which you can hardly touch (although you can probably cap it) because so many people depend on it, and charity, which is very useful, because it is actually the only time that the government weakens itself and strengthens civil society, essentially it subsidizes your charitable giving to independent organizations, which is very healthy for the country — except for those two exceptions, it seems as if they want to strip away everything else. The problem with tax reform is whenever you do that, as we did in ‘86, over the next three decades, the barnacles accumulate when all the powerful end up with their new cutouts and deductions and you’ve got to clean it away. If it can do that, if this tax reform can do that, that will be a triumph.

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