The Tax Code Is the Abundance Agenda’s Missing Villain

America faces a housing and infrastructure issue, and for once, people across the political spectrum agree that something should be done. From libertarians to many conservatives and progressives, there is a recognition that the regulatory state has hindered America’s ability to build enough homes, energy infrastructure, and productive capacity to ensure broadly shared prosperity.  

The debate that has followed has been largely focused on the right things: zoning, permitting, and the political machinery that turns two-year projects into ten-year ordeals. That work matters and deserves the attention it is getting. It is also a welcome change from stale, old arguments about why it would be in this country’s interest to abandon the pursuit of growth. 

But what has been dubbed the abundance movement has a blind spot: It ignores a tax code that compounds the damage caused by regulations. We have discussed this blind spot elsewhere. A complete abundance agenda requires tax reform driven by the same goals as regulatory reform: lower rates, immediate expensing of all capital investment, and a change in the tax base to stop penalizing saving and investment.  

Here, we narrow the focus to where the abundance movement has been most vocal — housing and infrastructure — and show just how much the tax code contributes to the problem. It rewards holding onto assets rather than relocating, favors old incumbents over new entrants, and prefers present consumption over future investment needed for consumption tomorrow.