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That made it worse tax policy: economists generally look with favour on measures that make the tax system more neutral, less so on increasing rates, at least from the standpoint of efficiency. Neutrality encourages people to focus on activities that earn the highest return, rather than those that qualify for the juiciest tax breaks. Higher rates punish them for the same thing.

And yet it was much better politics. Why? Because it was simple, rather than complicated. In all of these cases, the beneficiaries tend to be well to do, and relatively few in number. You’d think that would make them easy targets, politically — and when the issue is raising tax rates on top earners, that most always proves to be the case. Who’s going to take the side of “the rich” against everyone else?

But when it comes to stock options, or health benefits, or the tax treatment of small private corporations, the picture gets muddier. Are these really income? Are their beneficiaries really rich? The very complexity of these measures tends to give them the benefit of the doubt. Surely there must have been some valid public purpose to them at the time they were enacted, even if no one can quite remember what it was.

Complexity, in short, is the special interests’ best friend: in its protective thickets can be secreted all manner of mischief. That’s how the tax system got so full of preferences in the first place. Were it proposed simply to subsidize the incomes of the rich, or corporations — for that is what they amount to: transfers of income from the general public — the outcry would be deafening. But call it an “incentive” for this or that or an “accelerated depreciation allowance,” and it is easier to pretend it has some sort of underlying economic rationale.