Online and off, there’s a lot of hope and fear about the next year. Will we see our tax system revamped with new tax breaks and incentives that make things easier for the middle class? Will new social programs make the existing tax burden much heavier?

Predicting policy is notoriously tricky, but here are a few best guesses:

• How much will the tax code change? Less than you’d think. When politicians run for office or pose for the camera, they have every incentive to exaggerate their plans and abilities. Once it’s actually time to come up with a law, though, those exaggerated claims bump into each other and lead to some long, drawn-out compromises. Usually, these compromises are solved with

When Bernie Madoff made every scammer in history look like an amateur with his $50 billion haul, I’m not sure how many people wondered what positive effects he might have had.

But think about the argument for a stimulus program: let’s say we give Taxpayer A $1,000 right now, and saddle him with another $1,500 in higher taxes down the road. The $1,000 makes him feel richer, so he spends it — the $1,500 is a problem, but not just yet (and it’s a problem for a more robust, post-stimulus economy). The stimulus even works if it’s a different taxpayer: if taxpayer A gets the check and taxpayer B pays the consequences, B doesn’t spend less until the bill … Read more...