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

• Author: Dearborn, Philip M.

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...