Document Type



Canadian Tax Journal, Forthcoming


In the aftermath of the 2012 U.S. presidential election, while there is increasing consensus that high-income individuals’ taxes should increase, there is considerable disagreement about how this might best be done. In particular, while some favor raising upper-bracket marginal income tax rates, others prefer an approach that I call distributionally selective base-broadening. Here the idea is to restrict or deny the benefit of various tax preferences in such a way as to target the impact of the base-broadening on high-income individuals who have such items. An inevitable byproduct of such an approach is that different individuals will in effect face different tax bases.

This brief article, prepared for a forthcoming tax policy forum in the Canadian Tax Journal, assesses two such approaches that have received recent attention. The first is a “bucket” approach to limiting the use of particular tax preferences, endorsed by the 2012 Romney campaign. The second is the so-called “Buffett tax,” endorsed at one point by the Obama Administration. It argues that, while either might conceivably be better than politically feasible alternatives, they have significant defects that should be kept in mind as well. Indeed, in some respects both bring to mind the much-reviled alternative minimum tax.

Date of Authorship for this Version



Tax reform, base-broadening, Buffett tax, progressivity, deduction disallowance