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Would that it did. Reagan’s 1986 reform was brilliant. It was bipartisan, and real reform. It eliminated a world of tax breaks and special deals. It seemed to signal (to the hopelessly naive at least) that the special interests had lost. Reagan the reformer (with the help of key Democrats in Congress) had radically transformed the mother of all special-interest legislation: the tax code.

Almost overnight, however, everything undone by the 1986 reform was replaced very soon after. As Hacker and Pierson describe, “If you take a good look at the tax code now, you’ll see that it is chock-full of new tax breaks, far more expensive than the ones eliminated with such fan fare.”38

I once was on a conservative talk show, talking about just these issues. “You’re wrong,” the Glenn Beck wannabe scolded me, “all our problems would be solved if we had a flat tax.”

“Maybe,” I responded. “But how are you going to get a flat tax? What congressmen are going to give up the benefits they get from having a bunch of rich people and corporations coming to them each year begging for more tax benefits?”

The tax system is many things. It is first a revenue system for our government. But it is also an indirect revenue system for congressional campaigns. The critical insight here is to see just how complexity in the system is an enabler of the latter, even if it is intended to be the former. It is because no one understands the system that targeted benefits are relatively cost-free to those who give them. No one has the time even to recognize how this dynamic shifts the tax burden to those who can least defend against it. And more important for those who want a simpler tax system: Too few see how this dynamic ensures that simplicity is never achieved. One tax rate for everyone would give no one a special reason to write a check to their congressman. That’s all you need to know to understand why we’re never going to get one tax rate for everyone. So long as tax favors can inspire campaign funds, the game of tax favors will continue.

Thus again we could say: Getting a system of simpler taxes is difficult enough. Getting a system of simpler taxes when Congress has a direct financial interest in complexity might well be impossible.

3. Keeping Markets Efficient

Theorists and principled souls on the Right are free-market advocates. They are convinced by Hayek and his followers that markets aggregate the will of the public better than governments do. This doesn’t mean that governments are unnecessary. As Rajan and Zingales put it in their very strong pro-free-market book, Saving Capitalism from the Capitalists (2003), “markets cannot flourish without the very visible hand of the government, which is needed to set up and maintain the infrastructure that enables participants to trade freely and with confidence.”39 But it does mean that a society should try to protect free markets, within that essential infrastructure, and ensure that those who would achieve their wealth by corrupting free markets don’t.

Yet often the biggest danger to free markets comes not so much from antimarket advocates (the Communists and worse!) as from strong and successful market players eager to protect themselves from the next round of strong and successful market players. As Rajan and Zingales describe: “Capitalism’s biggest political enemies are not the firebrand trade unionists spewing vitriol against the system but the executives in pin-striped suits extolling the virtues of competitive markets with every breath while attempting to extinguish them with every action.”40

The perpetual danger is that this competition will be “distorted by incumbents,”41 because of an obvious fact not about markets, but about humans: “Those in power… prefer to stay in power. They feel threatened by free markets”42—even if it was free markets that gave them their power!

This is not a new point. Adam Smith, founding father of the modern free-market movement (even if, like most founding fathers, his work