Reforming the Tax Code

Show Me The Money
Jan 7, 2013 | By ThinkProgress War Room

Plenty of New Revenue Can Be Achieved Through Tax Reform
During deficit reduction negotiations in 2011, Speaker Boehner (R-OH) proposed finding hundreds of billions of dollars in revenues through closing loopholes, ending giveaways and limiting the deductions found in the tax code. Boehner and numerous other Republicans floated this same idea during the most recent set of deficit reduction and tax negotiations.

Boehner also indicated that he would consider a deal that was 1:1, spending cuts: revenues “balanced.”

We agree on both points.

We succeeded in raising tax rates on the wealthy in the most recent stage of deficit reduction, which was a very significant step in the right direction. But we still need more revenue in order to make the total deficit reduction package more balanced so we reduce the deficit, protect vital programs, and still leave room for important investments. Here’s where we can find that needed revenue — $1 TRILLION worth:

$523 BILLION: Limit extra deductions enjoyed by top-bracket taxpayers
$168 BILLION: Close international tax loopholes and incentives to move jobs overseas
$140 BILLION: Eliminate write-offs for corporate meals and entertainment
$70 BILLION: End special tax breaks for inventory
$25 BILLION: End special oil, coal, and gas tax breaks
$21 BILLION: Close the “carried interest” loophole for hedge fund and private equity managers
$11 BILLION: Eliminate the John Edwards-Newt Gingrich “S Corporation” loophole
$10 BILLION: Deny mortgage deduction for vacation homes and yachts
$3 BILLION: Eliminate corporate jet loophole
$3 BILLION: Close tax loophole for derivatives traders
$126 MILLION: Eliminate special write-offs for horse breeders (the Bluegrass Boondoggle)
TOTAL: $1 TRILLION over ten years

(Source: Congressional Budget Office, Joint Tax Committee, Treasury Department, Committee for a Responsible Federal Budget, Seth Hanlon and Michael Ettlinger.)

Some of these giveaways written into the tax code are well-known — the Big Oil tax breaks and the loopholes that allowed Mitt Romney to pay a 14 percent tax rate on more than $20 MILLION in income, for example, while others are much more arcane. But the fact of the matter is that many of these tax provisions are economically unjustifiable, wasteful, unfair, and simply unaffordable.

BOTTOM LINE: We’ve already put $1.8 TRILLION of spending cuts in place, but have only achieved $600 BILLION in new revenues. It’s time to solve our fiscal challenges using a balanced approach that achieves substantial new revenue by reforming our broken tax code.