Tax policy is hard work. But the work becomes harder when tax reform is done in a vacuum, when what ultimately gets signed into law narrowly focuses on the next election cycle rather than the looming fiscal cliff.Over the past decade, we’ve seen three major tax packages make it from Congress to a president’s desk: the 2017 Tax Cuts and Jobs Act, the 2022 Inflation Reduction Act, and the 2025 One Big Beautiful Bill Act. Each did some things right and other things wrong, but all moved away from a principle that used to be step one in designing a tax plan, regardless of party: revenue neutrality.No single bill is fully at fault for the fiscal crises facing our nation. But the mindset in Washington today will only make matters worse sooner than we think.
THE RIGHT’S TAX IDENTITY CRISIS
Revenue-neutral proposals, like many things in politics, have become a relic of the past. Former House Speaker Paul Ryan, to his credit, sought in 2017 through his Better Way agenda to have Republicans “envision tax reform that is revenue neutral.” Former Sen. Ben Cardin, in a bill to drastically reform individual and corporate taxation, put forth a plan that almost overemphasized revenue neutrality.
Paying for tax cuts was not a conservative litmus test or a progressive ploy to get bipartisan support for a bill — it simply used to be the expectation. Former President Barack Obama’s 2015 Green Book led with a section on revenue-neutral business tax reforms. Former President George W. Bush’s second-term Advisory Panel was required to submit only revenue-neutral options.
