Trump’s Tax Returns Show What Sort of Tax Reform We Need

The recent release of former President Donald Trump’s tax returns has triggered two seemingly contradictory reactions. Some people are eager to point out that considering his many heavy losses, Trump might not be as good as legend has it at turning profits. On the other hand, other folks complain about just how few actual dollars Trump paid in taxes.

There is an obvious connection between these different interpretations. Once again, we have evidence of just how poorly many Americans grasp basic tax facts.

Now, I agree that our tax system should be revamped. This system is a nightmare of double taxation of income and grotesque horizontal inequities in which—thanks to a labyrinth of politically motivated tax breaks and credits—taxpayers earning the same incomes don’t pay the same amount of taxes. The result is a system that penalizes work, saving, and investment and in turn dampens economic growth.

As such, I would first and foremost eliminate all tax breaks and other preferences that tilt the playing field in favor of politically connected interest groups. Our tax code would be radically improved if it weren’t used by politicians to subsidize certain behaviors while penalizing others. Incentives such as those to buy electric cars and bicycles, or to invest in (insert preferred industry here) are unfair, distortive, and often fail to achieve their stated goals. They should have no place in our tax code.

In addition, these special-interest tax provisions mostly benefit the well-connected taxpayers who lobby for their creation or for their extensions. These provisions also benefit politicians—Democrats and Republi