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Fifteen Years of Tax Policy

2 min readBy: Scott Hodge

Today marks my 15th year at the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation. Looking back, the world was different when I started: people still had dialup internet, Bill Clinton was president, and the Tax Foundation was just seven people in a small office. Now we have a staff of 24 (and growing). And while the differences between dialup and smart phones are stark, I find myself even more surprised by the shifts in tax policy.

In 2000, Washington was boasting about budget surpluses. The only debate over taxes was “which do we cut first?” The answer then came in the form of the Bush tax cuts of 2001. Soon after, however, we faced the tragedy of September 11th and the recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. that followed. In response, lawmakers sped up the Bush tax cuts to spur the economy.

Then the Great Recession hit in 2008, and an entirely new conversation about taxes began. Instead of questioning which taxes to cut or how to create growth, the tax policy discussion shifted to “how can we use the tax code to combat inequality?” and “how can we use the IRS to subsidize health insurance?” This led to the new Obamacare taxes and the “tax hikes on the rich,” before long job growth slowed and wages stagnated. Instead of providing a solution, poorly structured tax policy only exacerbated the problem.

Today, wages remain stagnate and economic recovery is moving at a snail’s pace. Not surprisingly, our economists rank the U.S. tax code as one of the least competitive tax systems in the industrialized world.

And when I look back at the last 15 years, where we’ve come from, and where we are, I see a tremendous opportunity—the U.S. is poised for real, positive tax reform. This is a truly exciting time to be a part of the tax reform movement.

The debate is moving away from ideas on how to redistribute income, and toward a discussion on how we can simplify the tax code, get rid of the junk, and have a system that promotes economic growth and better living standards.

It’s rewarding to watch presidential candidates actually compete to have the best tax reform plans. It’s gratifying to have governors reach out to Tax Foundation experts in search of ways to improve their state’s tax system.

I came to Washington in 1988, at the twilight of the Reagan Administration. Half of my staff wasn’t even born yet. I cut my policy teeth at other organizations, but the highlight of my career has been working to grow the Tax Foundation. Thank you for everything you’ve done to help us do that.

We’ll continue to do our part by developing the resources that inform taxpayers and raise the economic IQ of policymakers so that tax policy doesn’t stand in the way of success.