This kind of rebuilding doesn't happen with the tax code, especially with underperforming credits and tax expenditures. Instead of shipping the underperfoming guy off to Kansas City, Congress never looks at the tax code and says that it's time for a rebuilding year. But Bowles-Simpson wants to do just that. Here's Ezra Klein:
If we cleaned out the code entirely, we could raise the same amount of money by using much lower rates. The same holds true even if we preserve the refundable tax credits like the Earned Income Tax Credit and the child tax credit, as we should. Most of these loopholes and deductions are regressive and distortive -- the mortgage-interest deduction pushes people into bigger homes, for instance, and the exclusion for employer-based health care drives up the cost of health insurance.So, when it comes to the back of form, let's do what any good baseball GM would do and break them up.
The process they advocate -- zeroing out the code and then putting things back in one by one after we've considered them -- makes a lot of sense, and would make even more sense if we did it every 10 years or so. Unlike discretionary spending, the tax code doesn't get reviewed every time we pass a budget, and so it's a much safer home for inefficiencies and interest-group politics.