In an early spurt of spring cleaning, I came across an ancient, yellowed clipping from the New York Post.  Although there was no date on it, it is clearly from 1986, the year the Bears won the Super Bowl and Ronald Reagan got his tax reform. It tells the story of then-Treasury Secretary James Baker, who in his enthusiasm for both rap music and a simpler tax code, broke out into rhyming couplets during a rally to tout tax reform. His poetic achievement was based loosely on the Chicago Bears’ “Super Bowl Shuffle,” which members of the team recorded en route to their victory in Super Bowl XX, and which reached No. 41 on the Billboard charts before actually landing a Grammy nomination.

What was frightening, aside from the fact that I was a tax geek even then, was that much of the verse is still relevant today. 

 “They said tax reform was dead -- but now it’s alive.
Here’s the story, it began in ’85.
We drew up a plan and sent it out in May
But the special interests said “ain’t no way.”

“The Senate came close to stopping this bill,
but low rates and a broad base made it too hard to kill.”

Although the intention of broadening the base and lowering the rates was good, the ’86 Act actually raised rates on new saving and investment, eliminated the Investment Tax Credit, lengthened asset lives in depreciation, and put tighter limits on contributions to retirement plans. 

“Rosty started hearings before the fall,
They were Gucci to Gucci out in the hall.
December came, reform was off track
So to the Hill rode the Gipper to bring it back.”

Both tax reform and rap have declined in interest since their heyday -- rap music sales are reportedly off by 20 percent over last year, and tax reform is no longer at the top of everyone’s list of ‘must do’ items.  And yet, now may be the time that tax reform has a chance, since the Democrats have control of the legislative branch. Since every major tax reform act -- those of 1969, 1976 and 1986 -- have been passed under Republican presidents when the Democrats had control of at least one of the branch, the lesson is that something as big and earth-shaking as remaking the Tax Code needs bipartisan involvement.

“The conference met and everybody asked
‘Who can give the most to the middle class?’

“Rost and Bob finally agreed
Let’s take it from those who aren’t in any need”

The sponsors of the Tax Reform Act of 1986 had the best of intentions, but failed to achieve real simplicity, or even to slow down the mushrooming growth of regulations necessary to explain it.  Apparently, they failed to heed the wisdom in Baker’s next verse:

“From the goals of reform there can be no objections
Not even in a bill of technical corrections.”

Obviously, it will take much effort and bipartisan vision to succeed at a meaningful simplification of the tax code.

As Baker said at the time,

“All along it’s been a big tussle.
But we keep doing the tax reform shuffle.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access