Bush Administration tax policy has sometimes been defended as a piecemeal approach to fundamental reform. Consistent with fundamental reform, the tax cuts reduced marginal capital income tax rates and flattened rates. But the similarities end there. A well designed consumption tax would (a) be revenue-neutral; (b) broaden the base; (c) tax existing capitalthat is, not provide transition relief; and (d) treat interest income and expense in a consistent manner. The recent tax cuts have none of these features and in many cases have the opposite effects. The result is the worst of both worlds: lower growth, increased shelters, and increased regressivity.