One of the more dynamic figures on the current tax scene is Ed Kleinbard, a top-shelf New York tax lawyer who became Chief of Staff of the congressional Joint Tax Committee and then, in 2009, a full-time member of the USC tax faculty. Among the various topics he has addressed are international taxation, capital income taxation, and the taxation of financial services, all with a keen understanding of “what really happens” and (typically) constructive suggestions on how to make the system work better.
Perhaps the most theoretically salient aspect of Prof. Kleinbard’s scholarship is his characteristically irreverent approach to the problem of tax expenditures and tax reform. Like many historic assaults on traditional tax policy, it began with a speech, “Rethinking Tax Expenditures”, which Kleinbard delivered in 2008 and which was further developed in a subsequent lecture and a Joint Committee pamphlet. The essential point was that tax expenditure analysis, developed by Stanley Surrey and emphasizing the comparison of tax deductions, credits, etc. to direct spending measures, had to a large degree outlived its usefulness. The reasons for this included the difficulty, first noted by Boris Bittker in the 1960s, of defining a “normative” tax system from which deviations could be measured, and the wide variety of different provisions, ranging from business incentives to social welfare programs, that were covered by the tax expenditure label. In his speech and related publications, Kleinbard called for a more systematic typology of these provisions together with a more sophisticated analysis of the political forces that encouraged reliance on tax expenditures: a reliance which, the author noted, has proved largely resilient to traditional tax expenditure analysis and has, if anything, been encouraged by procedural reforms that make direct spending programs even more difficult. Continue reading "Tax Reform, Tax Expenditures, and the Role of the Tax Scholar"