Tuesday, July 29, 2014

Conversation with Givewell about tax reform

As Wikipedia explains, "GiveWell is an American non-profit charity evaluator created in 2007 by two former Bridgewater Associates investment analysts, Holden Karnofsky and Elie Hassenfeld."   Their main mission is to identify good causes that might then receive substantial funding.

One of the topics they've identified as a possible cause to consider funding is design work on fundamental tax reform.  So they have been interviewing various people in the field, most recently me.  You can find a file memo regarding their conversation with me here.

I was not as bullish as I would like to have been about charitable funding to develop new tax reform ideas, because of the great respect I have for the various plans that are already out there (e.g., X-tax, Graetz plan, income tax base-broadening), along with my view that the main obstacles are political rather than technical.

1 comment:

Victor Thuronyi said...

I would disagree with the proposition that " there is sufficient work being done on translating academic research on
possible tax reforms into actionable policy agendas and that additional work is probably not needed; barriers to tax reform are political, not technical."

There is plenty of room for useful technical work. Such work could tease out the simplification benefits of various reform ideas. For example, a common proposal is to tax capital gains and ordinary income at the same rate. To my knowledge, there is no technical study that identifies all the IRC provisions that could be repealed or modified if the same tax rate applied to both capital gains and ordinary income, nor is there a clear view as to whether and how the capital loss limitation could be simplified under such a regime. If technical work of this kind were done, it could increase the attractiveness of reform plus it would enable reform's implementation once political will for it materialized.

Am I wrong?