Gavelwrench Fishfire | A Blog

I may not have creepy blue eyes and a blackboard to explain the Tax Reform Act in detail, but I am armed with a series of college essays I was forced to write about it.

1986. This year is important for two reasons. The first reason being I was born *confetti burst*!!!!! And the second being that Congress managed to pass the most comprehensive overhaul of America’s tax code in its history. This overhaul was creatively designated the Tax Reform Act of 1986.

I know Gavelwrench doesn’t seem like the most appropriate forum for a detailed description of tax legislation, but bear with me. I may not have creepy blue eyes and a blackboard to explain the Tax Reform Act in detail, but I am armed with a series of college essays I was forced to write about it.

I bring it up only because of the passing this week of former Democratic chairman of the powerful Ways and Means Committee, Dan Rostenkowski. Everything I know about him I learned from reading Showdown at Gucci Gulch in Poli 100. The book is an exhaustive account of how the legislation actually got passed, i.e. with lots of bipartisan bickering and compromise.

To my great surprise, the book was actually interesting. Rostenkowski, before being mired in corruption scandals and forced out of the House, shines brightly as the hard-nosed pol who struck deals with GOP lawmakers on several key parts of the legislation. Some parts feel sensationalized, I think to make it more palatable to readers, but I got the sense most of what was written happened. Bipartisan legislation is as fraught with intrigue as you might imagine, not that we see very much of it these days.

I don’t plan on explaining the Tax Reform Act, but the important thing is that it drastically simplified the tax code. This probably doesn’t sound all that impressive to anyone who has done their own taxes, but it’s true. It also got rid of some of the more horrendous tax shelters, though not all, and managed to lower taxes. You don’t have to like Reagan to know that this legislation made a hell of a lot more sense than the Bush tax cuts.

As a piece of collegiate nostalgia, I thought I would go ahead and share one of the really terrible essays I wrote about the book. You’ll have to forgive some of my more firey, partisan ¹ thoughts. Being in college means having opinions on everything, even the tax code. You’ll also have to forgive my poor diction, sloppy prose and night-before-it’s-due writing. Being in college also means writing a lot of crappy papers you wish you had proofread more.

The essay is about my general impressions of the book. It doesn’t mention Rostenkowski as my other essays do, but it gives a better feel for the legislation:

September 18, 2006

There were many factors that led to the tax reform plan enacted in 1986, least of which was the growing inequity among income-earners in relation to the amount they were being taxed (i.e. the rich were less taxed than middle and low-income earners were).  One would imagine that this factor, affecting most Americans, would be the lead catalyst, but the Reagonomics mantra went something like, “opportunity, growth, expansion, and capital formation,” meaning that what was good for business was good for America.  Grossly mistaken—and grossly Republican I might add—this lead to the largest peacetime budget deficit from $60 billion in the Carter administration to $200 billion under Reagan.  While the Bradley-Gephardt bill did nothing to immediately address that (it was “revenue neutral”) the benefits could be seen throughout the economy if passed.

The motivation for the president’s initial plan was to continue to lower the income tax, inadvertently decrease the budget deficit, and all without seeming overtly pro-business.  With the help of Pearlman and McLure (and undoubtedly many others) he created the initiative called Tax Reform for Fairness, Simplicity, and Economic Growth.  I think it also had a lot to do with avoiding embarrassment.  A politician’s aim is to look in control at all times, and with a deficit that big, and no way to increase revenue without increasing taxes, something bipartisan had to come about.  It’s also stressed that President Reagan was always pro-lowering-the-individual-tax-burden-on-everyone, even at the expense of his big-business buddies.

I found three things the most surprising at the start of this book.  The first was that at any mention of the words “tax reform” there was an army of Gucci-clad lobbyists to thwart it.  Not even gaping tax loopholes, providing the largest corporations exemptions from paying income tax altogether, could anger the American public enough to force elected officials into fixing the tax system more expediently.  Secondly, being a loyal Democrat, it’s always disappointing to hear how poorly one’s own party is abusing the system by taking as many kick-backs from PACs as the other guy.  Lastly, I was surprised at Senator Bradley’s patience to have started on this idea in the early 80’s, and to persevere even after suffering continuous defeats in the matter, especially when Walter Mondale wouldn’t even adopt it as a campaign issue in ‘84.  In an age where flag burning amendments, abortion laws, and immigration reform pass through one ear and out the other, or as I call it, the issue-du-jour approach to governing, I could only hope we have more legislators take the Bradley approach.  That is to say, find an issue and stick with it until it is resolved.