Earlier quoted context omitted.
The default tax rule in the U.S. is that any benefit you receive, in any form, is earned income and taxable. Layered atop that default rule are a long list of exceptions, which are generally categorized as (1) exemptions and (2) deductions. If you attend a Ph.D program where the advertised tuition is $30k per year, and you get a tuition waiver (or w'ever it's called), the default tax rule says that you still earned i…
Getting rid of exemptions and deductions is also "simplification" and "reform". I mean, I agree that the plan is focused on paying for corporate and high end tax cuts, but how do you do tax simplification if special interests are all off limits?
The fact of the matter is that the 1986 tax reform _already_ tremendously simplified the tax code. Much of the cynicism about the modern tax code is latent from the 1986 reform effort, when politicians were drumming up support for very difficult changes. Before 1986 individuals could take deductions on interest payments, for example, just like businesses; after 1986 individuals were only left with the mortgage interest deduction. On the other hand, the corporate code was also tremendously simplified, and like I said did away with esoteric technical requirements rife with loopholes. People were willing to give up their exceptions because corporations lost a lot of theirs, and everything at least felt more equitable.
I would argue that the major thrust of the current reform effort is neither simplification nor a quid pro quo. Even with 30 years of accreted deductions, things are incomparable to the pre-1986 system. The major thrust of the current reform effort is simply to shift more of the tax burden from corporate taxes to individual taxes.
I don't know why, but I'm sort of ambivalent about all of this, frankly. Perhaps partly because a significant number of of my yearly deductions are business deductions, which I know the GOP won't touch. I think it's dishonest to sell the current reform as simplification, because while some aspects are being simplified, that's neither the underlying motivation nor design. The thrust of the current reform effort is simply to cut corporate rates and replace that lost revenue with revenue from personal income taxes.
So, for example, personal exemptions are being folded into the standard deduction and sold as a "simplification". But the only reason for doing that is to hide the fact that such a combined deduction will be less than the current standard deduction+exemptions. Those things are separate for a simple reason--the standard deduction is fixed per household, but the personal exemption is per household member. It could have equally been simplified by getting rid of the standard deduction and increasing personal exemptions, but doing that wouldn't have raised revenue. And that's why it's disingenuous to sell this as simplification--the primary purpose is to generate revenue from personal income taxes to offset reductions in corporate income taxes.
There are many reasonable arguments for supporting the GOP tax plan. But people should be wary of rationalizing things in a way that causes them to support or reject the plan even though it fundamentally disagrees with their personal policy preferences.
EDIT: Quote from a 2011 review of the 1986 reform:
"[The 1986 t]ax reform was not only revenue neutral but also
roughly distributionally neutral: This tax reform was not to
become an occasion for significantly shifting the
distribution of income tax burdens among income classes. So
distributional neutrality, along with revenue neutrality,
became guiding principles for the legislation."