Printer Friendly

The Tax Decade: How Taxes Came to Dominate the Public Agenda.

This book provides a fascinating (honestly) tale of the dipsy-doodle tax gyrations of the 1980s and a technical perspective on the very complex world of taxes as they relate to each other, to the economy and ultimately to those who pay them.

The importance of the 1980s tax policy undoubtedly exceeds that of any other decade in our history. In the author's own words:

The 1981 to 1990 decade began with one of the largest tax cuts in the history of the United States. The rest of the decade was to witness the enactment of a continual series of tax changes. . . In addition, the year 1986 was to herald a tax reform so detailed and comprehensive that the new tax code itself was to be named the Internal Revenue Code of 1986.

For the well-informed tax persons this book will provide a new dimension to their understanding. For those who do not follow tax developments carefully it will provide a clear picture of what happened in the 1980s. It is a Washington insider's view of how tax policy is made.

The book is developed as a chronology of events that describe not only the changes in tax policy but also the changes in our views about government. It provides a historical perspective of our tax policies and describes the change in long-term tax trends that occurred early in the decade. As Steuerle explains it, "The 1981 tax cuts brought down the final curtain on a long-running play." That play consisted of tax reductions that were featured in the 1981 act and in all of the other postwar tax bills. The reductions were based on the assumption that future growth in revenues would offset the immediate loss of revenues. Unfortunately, things did not work out that way in the 1980s after the 1981 tax reductions.

The projected economic growth did not materialize, federal budget deficits mushroomed, tax shelters flourished and private purpose tax-exempt bonds continued a rapid growth, and a series of developments finally led to the milestone Tax Act of 1986. The meaning of these developments is the heart of this book. Steuerle describes the incredible series of events that led a conservative President, liberal congressional leaders and professional tax writers to agree on the many important and controversial changes contained in the 1986 law.

The author gives the reader an understanding of how this happened by describing the political climate, the way Congress works, and how the Treasury and Office of Management and Budget (OMB) staffs did their jobs. Steuerle's grasp of the many interrelated forces that created the final policy is amazing, as is his ability to describe them.

While this book still may not convince many state and local officials that the loss of sales-tax deductibility and the limiting of tax-exempt bond issues was good policy, it at least will provide a clearer picture of how and why it happened. It also suggests what may be next on the tax reform agenda.

One of the strengths of the book is its nonpartisan views of government tax policy. The basic message is that piecemeal, incremental tax policies will ultimately only make things worse. The author concludes that, "Comprehensive approaches to issues are the only way to get a handle on what is and is not possible, what needs to be replaced and what retained, how all the many pieces fit together, and whether financing is adequate for all needs."

This book will provide valuable insights for all state and local officials who must make sound policies in the midst of political chaos. It reads easily and only occasionally lapses into technical discussions. Although I mostly skipped such passages, they do provide good insight into how very complex government policies can be when we look below the surface. Fortunately, most of us don't need to look that deep, and the book does not force us to do so.

Overall, this is an excellent book that I am glad I read. I found it both personally and professionally rewarding.

The Tax Decade is available for $45 hardcover or $18.50 paperback from the Urban Institute Press, University Press of America, 4720-A Boston Way, Lanham, MD 20706 (301/459-3366).
COPYRIGHT 1993 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Dearborn, Philip M.
Publication:Government Finance Review
Article Type:Book Review
Date:Apr 1, 1993
Words:698
Previous Article:Reviving the American Dream: The Economy, the States & the Federal Government.
Next Article:Who Benefits from State and Local Economic Development Policies?
Topics:


Related Articles
Left for Dead: The Life, Death, and Possible Resurrection of Progressive Politics in America.
CONGRESS CAN'T SEEM TO LET GO : STATES STILL WAITING FOR WASHINGTON TO ALLOW THEM TO START RUNNING WELFARE, OTHER PROGRAMS.
John Quiggin on progressive reform.
Lawmakers emerge from battle ready to take on some bigger issues.
Big Pharma.
The Battle for the Soul of Capitalism.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters