Friday, July 29, 2011
It’s now clear that Congress won’t be raising taxes when it raises the debt ceiling this time. But in Washington, the magical thinking about tax reform continues. The fantasy is that by eliminating special loopholes, credits, deductions and exclusions (tax expenditures policy geeks call them), Washington will be able to lower income tax rates and raise big dollars at the same time. ...That’s because most of the new credits and tax breaks (such as those to promote green energy and conservation) account for only a small portion of the $1.1 trillion in annual tax expenditures on the JCT list, points out John L. Buckley, who spent 37 years as a Congressional staffer and retired last December as Chief Tax Counsel of the House Ways & Means Committee. In a new paper, Buckley, now a visiting professor at Georgetown University Law Center, calculates that 95% of the total annual individual tax expenditures (by dollar) go to 10 basic areas that hardly sound like narrow, special interest loopholes.