For months, Donald Trump has used "tax cuts" and "tax reform" interchangeably, because he apparently believes they mean the same thing. As far as the president is concerned, if Republicans create massive tax breaks for the wealthy and big corporations, they've necessarily "reformed" the federal tax code.
Perhaps now would be a good time for a refresher.
Traditionally, policymakers create various tax breaks, incentives, loopholes, credits, and giveaways, for a variety of purposes, which end up creating a cluttered and consequently complex system. The point of tax reform, in a conceptual sense, is to simplify: by closing loopholes and eliminating various politically motivated tax treats, the overall system, in theory, should be fairer and ultimately better.
Which is precisely why it's ridiculous to describe the current Republican scheme as "reform." Bloomberg Politics had an interesting piece last week:
Lawmakers who sped a bill through the U.S. House last week may have handed a few more goodies to Wall Street's wealthiest than they realize.
Investors in billion-dollar hedge funds might be able to take advantage of a new, lower tax rate touted as a break for small businesses. Private equity fund managers might be able to sidestep a new tax on their earnings. And a combination of proposed changes might allow the children and grandchildren of the very wealthy to avoid income taxes in perpetuity.
These are some of the quirks that tax experts have spotted in the bill passed by the House on Nov. 16, just two weeks after it was introduced.
Ordinarily, one might expect a genuine attempt at tax reform to identify these "quirks" and eliminate them. Republicans, on the other hand, are moving forward on legislation that creates new "quirks."
Vox's Ezra Klein had a related piece this morning, explaining that the Senate Republicans' tax plan "is thick with obvious loopholes that will do little for the economy but will act as a full-employment program for tax lawyers."