Last week I discussed the roots of tax reform dating back to the 1960s. Until the late 1970s, it was a movement driven largely by liberals trying to close tax loopholes and make the rich pay their fair share. By the early 1980s, conservatives had joined the debate.

In my earlier post, I said that inflation was the most important factor that largely ended the liberal tax reform effort. People were more concerned with tax cuts and stimulating growth than they were with fairness, which was the principal liberal objective.

But there was a theoretical element as well. Liberals had a theory of the ideal tax system based on the notion that taxable income should consist of consumption plus the increase in net worth over the course of a year. This would include taxation on unrealized capital gains, which is a constitutional problem as well as a practical one. Liberals of that era were also strong in their support for “vertical equity,” which meant steeply progressive tax rates.

Conservatives did not really have a competing idea; they just opposed what the liberals were for. Treasury Secretary William E. Simon, who served from 1974 to 1977, thought the lack of a conservative alternative to the liberal idea of tax reform put conservatives at a disadvantage. He recruited the Princeton economist David Bradford to come up with an ideal conservative tax system.

Professor Bradford thought that a pure consumption tax was best from a conservative point of view, because it exempted the taxation of wealth and savings implicit in the liberal ideal. He worked through many important technical problems with a consumption-based tax system, and his report was published as “Blueprints for Basic Tax Reform,” issued by the Treasury just days before Jimmy Carter took office in 1977.

For the next several years, conservatives concentrated on reducing statutory tax rates, which Ronald Reagan accomplished in 1981. His tax cut reduced the top income tax rate to 50 percent from 70 percent and the bottom rate to 11 percent from 14 percent. Conservatives wanted to go further, but rising budget deficits precluded further tax cuts.

In December 1981, two Hoover Institution fellows, Robert E. Hall and Alvin Rabushka, put forward a tax reform plan that married Professor Bradford’s idea of a pure consumption base to a flat-rate tax system. In an op-ed article in The Wall Street Journal, they contended that their proposal was so simple that everyone could file their income taxes on a postcard and that a single rate of 19 percent, including a large personal exemption, would collect the same revenue as the existing income tax.

Conservatives were very excited to finally have an ideal tax system they could support. Moreover, it gave them a way to continue to talk about tax rate reduction in an era constrained by large budget deficits. Some conservatives, such as the economist David Hale, even asserted that the Hall-Rabushka plan would raise net revenue and reduce the deficit because it would expand economic activity.

By July 1982, Reagan said he was very interested in the idea of tax reform based on a flat rate. When asked about it, he said:

Let me just say, we support looking at that. It’s a very tempting thing, because let’s all of us admit that probably there is more resistance to the income tax in America today, not from the amount of it, but from the complexity of trying to figure out what the amount should be, that the people are pretty fed up with something so complex that even the government has to warn that their own agents cannot be depended on to give you sound advice as to what your tax burden should be. I can remember when you used to go in there to them and just hand it to them, and they’d tell you what you owed and that was it. They can’t even do it anymore. So, the flat rate does look tempting.

However, to the dismay of conservatives, Reagan did not endorse the Hall-Rabushka plan and, in fact, went in the other direction, supporting the largest peacetime tax increase in American history, the Tax Equity and Fiscal Responsibility Act, which he signed into law on Sept. 3, 1982.

Undeterred, congressional conservatives went to work on their own tax reform plans. My former boss, Representative Jack Kemp of New York, and Senator Robert Kasten of Wisconsin, both Republicans, drafted a proposal that would have established a nominal 25 percent flat rate, although effective rates would vary. They proposed paying for this rate reduction with various reforms, including elimination of the deduction for state and local taxes, one of the biggest tax expenditures.

Simultaneously, Senator Bill Bradley of New Jersey and Representative Richard Gephardt of Missouri, both Democrats, developed a tax reform plan with a top rate of 30 percent. It was also meant to be revenue-neutral and paid for rate cuts with base-broadening. One of the big revenue raisers in the Bradley-Gephardt plan was the inclusion of untaxed fringe benefits in taxable income.

People quickly noticed a lot of overlap between the Kemp-Kasten and Bradley-Gephardt plans. (See the Congressional Budget Office’s side-by-side comparison from October 1984.) This, more than anything else, persuaded members of Congress that bipartisan tax reform was doable. The fact that the Senate was under Republican control and the House under Democratic control was also important, I think, because each side knew its interests were protected.

On Nov. 1, 1984, the Treasury Department issued the tax reform study Reagan had asked for in his State of the Union address in January of that year. Although the plan was generally praised, some conservatives were highly critical of its impact on the cost of capital. The Treasury’s former assistant secretary for economic policy, Paul Craig Roberts, called for its rejection.

The White House reviewed the Treasury study, made some adjustments and sent a formal proposal to Congress in May 1985. There followed 18 months of intense congressional debate and negotiation, well reviewed in the 1988 book “Showdown at Gucci Gulch: Lawmakers, Lobbyists and the Unlikely Triumph of Tax Reform” by Alan Murray and Jeffrey Birnbaum, reporters at The Wall Street Journal. It is still considered the go-to source on the politics of tax reform.

In my view, the preconditions for tax reform that were present in the mid-1980s do not now exist. That effort built on 25 years of research on tax reform that resulted in two previous tax reforms, in 1969 and 1976, similar ideas among Republicans and Democrats, and strong leadership from the White House, Treasury Department and the chairmen of the House Ways and Means Committee and Senate Finance Committee.

I believe it will take several more years, at least until after the 2016 elections, before meaningful tax reform can move forward.

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform — Why We Need It and What It Will Take.”The Roots of the Tax Reform Act of 1986, Part II