The recently published Hamilton Project report, "A Dozen Economic Facts About Tax Reform," stated in its introduction that "today’s tax reform debates are often based on misconceptions."

That is an understatement.

As my former employer Sen. Pat Moynihan was fond of saying, "Everyone is entitled to his own opinion, but not to his own facts."

This report exposes tax reform misconceptions and provides some basic facts and analytic tools to help reach an informed decision about the real trade-offs and appropriate outcomes in the tax reform debate.

Balancing short-term economic recovery needs with long-term deficit reduction is a daunting task. The consensus of most objective observers is that revenues need to increase and spending, particularly entitlement spending, must be reduced. This Tax Notes special report from Harry L. Gutman is about revenues.

The first section of the report provides a macro context, reviewing briefly the most recent Congressional Budget Office forecasts, comparing the tax burden in the United States with that of the other OECD countries, and finally looking at the revenue sources in all the OECD countries. The next section describes the policy objectives of any tax regime: equity, efficiency, and administrability. It compares two fundamental tax bases: income and consumption. Next, it defines and discusses the tax expenditure concept, which provides a framework from which to analyze both the extent to which government spending is accomplished through the tax system and the benefits and deficiencies of using the tax system in that way. The next two sections comment on the taxation of business income and the wealth transfer tax. The final section describes the practical constraints on legislative action. The specific congressional procedural rules that govern the consideration of tax legislation, as well as the need for executive leadership, are addressed.