With President George W. Bush’s Tax Commission about to issue its recommendations – opening up a rare opportunity for fundamental tax reform – we would do well to remember one of the iron rules of economics: whatever we tax, we will get less of and whatever we do not tax, we will get more of. In other words, we should tax what is bad, not what is good.

By this logic, America’s current tax system is as wrong-headed as it is backward: it discourages savings, job creation and higher wages, while encouraging energy consumption, waste and environmental degradation. Sadly, the Tax Commission has decided to ignore many of these perverse incentives. This is unfortunate, because reversing them could not only help to solve many of our nation’s most pressing problems, but also yield a tax system that better reflects American values.