The politics of tax reform

The U.S. federal tax code is in desperate need of reform. In this year's presidential election, both Republican nominee Mitt Romney and President Obama made corporate tax reform an issue in the campaigns, and it was one issue on which the candidates found more common ground than difference, with proposals for lower rates and a shift to or, in the presidents case, at least openness to a territorial corporate tax system. There is also broad agreement that the individual side of the U.S. tax code is in disarray. Setting aside the political arguments about who is or is not paying their fair share of income taxes, over the past decade, the U.S. has imposed on itself a regime of temporary tax policymaking. While a favorite statistic of would-be tax reformers is that there have been more than 15,000 changes to the tax code since the last overhaul of the federal income tax system in 1986, the defining characteristic of income tax policy in this country is captured by a 2011 publication from the Joint Committee on Taxation (JCT). The JCT document listed expiring federal tax provisions by year over the decade from 2010-20. Not including temporary disaster relief tax breaks, the three years beginning with 2010 saw the expiration of 31, 56, and 37 provisions of the federal tax code, respectively. Adapted from the source document.