“The U.S. tax code is broken. That’s mainly because it collects revenue in an arbitrary, distortionary, and unfair manner. At the heart of the problem are “tax expenditures”: credits, deductions, and loopholes that benefit the government’s favorite groups and behaviors.
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It’s a patchwork of exceptions and preferences designed more by lobbyists than by public servants. Policymakers claim they are encouraging savings, promoting fairness, or aiding the poor. In reality, many tax expenditures—also known as tax breaks—serve no purpose beyond enriching powerful interest groups.
The solution is to return to first principles. We must begin by defining the tax base in a principled way. What should count as income? What should be taxed, and when? Only then can we properly distinguish between legitimate exemptions and unjustifiable giveaways.”