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Idea of the Day: How We Should Approach Tax Reform

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As Americans across the country filed their tax returns over the past few months, two competing approaches to improving our federal tax code have emerged. One approach is to offer specific proposals to reform, eliminate, or otherwise cut back on the unfair and inefficient tax breaks—known as tax expenditures—that clutter the current code. The other approach is to offer specific proposals to cut tax rates, promise to pay for them with tax-expenditure reforms, but stay silent on exactly how to do that.

Tax expenditures are spending programs hidden in the tax code that allow individuals and corporations to reduce their tax bill through deductions and exemptions, credits, or preferential rates for certain types of income. They include broadly utilized tax breaks such as charitable gift deductions and state and local tax deductions, and lower capital-gains tax rates, but they also include obscure and narrowly defined tax breaks such as those that benefit only hedge-fund managers, oil companies, or corporate-jet owners.

Both President Barack Obama and House Budget Committee Chairman Paul Ryan (R-WI) agree on the need to reform these tax expenditures. But that is about all they agree on.

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To speak with our experts on this topic, please contact:

Print: Katie Peters (economy, education, poverty, Half in Ten Education Fund, women's issues)
202.741.6285 or kpeters@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, LGBT issues, gun-violence prevention, the National Security Agency)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (energy and environment, Legal Progress, higher education)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org

 

This is part of a regular column: Idea of the Day

For more from the same column, click here