This paper provides an historical overview of tax reform with an eye toward identifying conditions that would make successful reform plausible in the near future. Burman begins by analyzing the environment that led to tax reform in 1986 and posits that successful reform would require strong leadership from the White House, bipartisan support, and a new source that would make possible substantial income tax rate cutsall of this while addressing the concerns of Republicans that new revenues would fuel a growth in government and of Democrats about progressivity. He argues that the new revenue source should be a value-added tax with proceeds earmarked to pay for government health care. This could slow healthcare spending because the tax would stimulate efforts to find cost savings, would result in a more efficient revenue system, and would go a long way towards addressing our long term budget imbalances.
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