The political Left has long used the tax code to accomplish social goals, but the Right has certainly not been immune from the same temptation. The latest and most fully expressed such intention on the Right has come from Republican presidential contender Rick Santorum.
Santorum's plan contains commendable tax reductions on saving and investment, lower income tax rates for individuals, and notably reduces the corporate tax rate on all corporations.
But it also contains intentional provisions to create economic distortions, such as a zero percent tax rate on manufacturers and tripling the per-child tax credit.
Santorum is correct that our current tax code is tough on both manufacturers and families with children. Had the per-child tax credit been adjusted for inflation from its level in the 1960s it would be many times larger than even Santorum proposes. It's also true that a major factor driving American manufacturing jobs overseas is the current tax code.
But should our tax code purposely favor manufacturing over other industries, or should it favor families with children over families without children? The answer is no.
One of the widely accepted tax reform principles on the Right is neutrality-economic production should be taxed only once, and at the same rate. To subject different industries to different tax rates creates economic distortions.
It's also fundamentally unfair. Imagine the outcry if workers for a software company paid a 28 percent income tax while furniture manufacturer workers paid zero, simply because he worked for a manufacturer.
Neutrality should be a primary goal of any tax reform worth its name. We want our companies and industries to compete based on business and market factors, not because of distortions in the tax code.
We also want our economy to deliver accurate results. No one knows which companies or industries should outperform others, and it's foolhardy for government to attempt to make such guesses.
Regardless of Santorum's electoral possibilities, his ideas about using the tax code to purposely create distortions in the economy should be promptly rejected.