Tax Policy Center co-director Eric Toder is feeling good today. Why? Some people known for not doing much of anything productive are saying things that sound remarkably like some people who plan to do something productive!
The House Ways and Means Committee, in a letter signed by all its Republican members to Budget Committee Chairman Paul Ryan, states its intention to “make the tax code fairer by scaling back preferences that distort economic behavior and often benefit only a narrow group of individuals and businesses.” These cuts in preferences will be needed to meet Chairman Ryan’s goal of a tax code that raise the same revenue as current law with sharply lower individual and corporate rates.
A letter makes it even more exciting! And if there's anything that policy wonks love, it's when their long-held ideals are officially recognized as the common-sense, right thing to do regardless of the politics:
For years, we have fought against proposals by politicians of both parties to lard the tax code with more special credits, deductions, and exemptions for supposedly worthy purposes. We have argued that these preferences make the tax law more complicated, distort economic choices, create unfairness in the treatment of taxpayers with equal ability to pay, and produce a general public cynicism with the income tax system. We have called the preferences “backdoor spending” or “tax expenditures” and argued that many of them would not stand up to scrutiny if introduced as direct spending programs.
And now that the Ways and Means peeps are on the same page with the TPC — that is, a whole slew of tax expenditures need to be on the chopping block — everyone's ready to get to work on the most important part: actually following through with a real plan!
But there’s still a big problem: With the exception of a reference to benefits for corporate jets in the Senate’s resolution, there is no mention of a single tax benefit that the Committees would eliminate. And most of the money from tax expenditures comes from popular and widely used provisions, such as the exemption of employer benefits for health care and the home mortgage interest deduction.