The Tax Code is RIDICULOUS.

A peak into mayhem...

Our federal tax code is a disaster.

It's a bureaucratic nightmare, requiring armies of CPAs and lawyers to navigate. It's a damper on growth, imposing penalties on positive behaviors like research and offering harmful special breaks for bad things like coal extraction. It's a distributional mess, imposing higher rates across the board to make room for an endless litany of lobbyist-extracted carveouts and loopholes. Worst yet, it's not getting better; it's getting worse.

Politicians of all stripes are constantly promising even more complexity on the campaign trail. There is little more fashionable on the Hill than a new tax credit, deductions, exclusion, or exemption. These tax expenditures (as they are collectively called) never cease to fail to solve the problem they are aimed at, yet have been deployed ambitious and bipartisanly for decades.

To point to one timely example, our newly elected President Trump proudly campaigned on creating new exclusions for overtime pay, tips, and even things as marginal and specific as car payments. Needless to say, these changes would add more intricacies to our already endlessly spanning pages of code.

Earlier today, I was pondering this fact as a thought jumped into my mind: "I wonder exactly how many tax expenditures there are and how much they cost in total?" It didn't take long for me to find the answer. Thankfully, the Department of Treasury makes the data on tax expenditures readily available on its website.

From their data, there appear to be 169 tax expenditures in total, costing the United States over $1.5 trillion dollars last year. This is a truly whopping sum—nearly equivalent in size to Social Security. I've listed them here so you can look at each one for yourself.

1. Exclusion of employer contributions for medical insurance premiums and medical care - $215.860 billion

2. Exclusion of net imputed rental income - $147.240 billion

3. Defined contribution employer plans - $133.860 billion.

4. Capital gains (except agriculture, timber, iron ore, and coal) - $115.630 billion

5. Deductibility of charitable contributions other than education and health - $47.410 billion

6. Deductibility of mortgage interest on owner-occupied homes - $31.820 billion

7. Deductibility of nonbusiness State and local taxes other than on owner-occupied homes - $7.030 billion

8. Defined benefit employer plans - $70.100 billion.

9. Capital gains exclusion on home sales - $54.410 billion

10. Self-Employed plans - $43.180 billion

11. Treatment of qualified dividends - $35.880 billion

12. Step-up basis of capital gains at death - $49.240 billion

13. Individual Retirement Accounts - $32.690 billion

14. Reduced tax rate on active income of controlled foreign corporations (normal tax method) - $45.190 billion

15. Deductibility of State and local property tax on owner-occupied homes - $6.910 billion

16. Social Security benefits for retired and disabled workers and spouses, dependents, and survivors - $30.700 billion

17. Credit for increasing research activities - $28.220 billion

18. Exclusion of interest on public purpose State and local bonds - $29.810 billion

19. Energy production credit - $7.450 billion

20. Child credit - $67.520 billion

21. Deductibility of medical expenses - $12.260 billion

22. Exclusion of life insurance death benefits - $15.320 billion

23. Exclusion of benefits and allowances to armed forces personnel - $15.990 billion

24. Medical Savings Accounts / Health Savings Accounts - $12.830 billion

25. Exclusion of veterans death benefits and disability compensation - $11.640 billion

26. Credit for low-income housing investments - $12.800 billion

27. Allow 20-percent deduction to certain pass-through income - $37.240 billion.

28. Energy investment credit - $25.970 billion

29. Self-employed medical insurance premiums - $8.150 billion

30. Deductibility of charitable contributions to health institutions - $9.000 billion

31. Tax credits for post-secondary education expenses - $13.940 billion

32. Refundable Premium Assistance Tax Credit - $15.047 billion

33. Deduction for foreign-derived intangible income derived from trade or business within the United States - $15.240 billion

34. Tax credits for clean vehicles - $10.560 billion

35. Deductibility of charitable contributions to educational institutions - $6.230 billion

36. Exclusion of interest spread of financial institutions - $11.100 billion

37. Qualified tuition programs (includes Education IRA) - $3.020 billion

38. Exclusion of employee meals and lodging (other than military) - $7.530 billion

39. Exclusion of workers' compensation benefits - $8.870 billion

40. Additional deduction for the elderly - $7.540 billion

41. Exclusion of scholarship and fellowship income (normal tax method) - $4.430 billion

42. Carryover basis of capital gains on gifts - $4.590 billion

43. Parental personal exemption for students age 19 or over - $2.210 billion.

44. Exclusion of income earned abroad by U.S. citizens - $5.420 billion

45. Deferral of capital gains from like-kind exchanges - $4.020 billion

46. Credit for residential energy efficient property - $7.090 billion

47. Accelerated depreciation on rental housing (normal tax method) - $2.440 billion

48. Exception from passive loss rules for $25,000 of rental loss - $5.470 billion

49. Earned income tax credit - $2.700 billion

50. Premiums on group term life insurance - $3.440 billion

51. Advanced manufacturing production credit - $0.430 billion

52. Clean hydrogen production credit - $0.340 billion

53. Credit for child and dependent care expenses - $3.480 billion

54. Carbon oxide sequestration credit - $0.330 billion

55. Exemption of credit union income - $2.970 billion

56. Tax credit for orphan drug research - $1.740 billion

57. Low and moderate-income savers credit - $1.860 billion

58. Exclusion of interest on hospital construction bonds - $3.120 billion

59. Deductibility of student-loan interest - $0.560 billion

60. Interest Charge Domestic International Sales Corporations (IC-DISCs) - $1.620 billion

61. Exclusion of reimbursed employee parking expenses - $1.827 billion

62. Capital gains exclusion of small corporation stock - $1.780 billion

63. Exclusion of interest on bonds for private nonprofit educational facilities - $2.280 billion

64. Capital gains treatment of certain agriculture income - $1.550 billion

65. Premiums on accident and disability insurance - $1.720 billion

66. Deferral of income from installment sales - $1.750 billion

67. Credit for certain employer contributions to social security - $1.520 billion

68. Clean fuel production credit - $0.000 billion

69. Income of trusts to finance voluntary employee benefits associations - $1.500 billion

70. Exclusion of GI bill benefits - $1.460 billion.

71. Exclusion of employer-provided educational assistance - $1.660 billion

72. Excess of percentage over cost depletion, oil, and gas - $1.530 billion

73. Exemption or special alternative tax for small property and casualty insurance companies - $1.400 billion

74. Exclusion of interest on rental housing bonds - $1.610 billion

75. Employer-provided child care exclusion - $0.760 billion.

76. Exclusion of parsonage allowances - $0.959 billion

77. Credit for energy efficiency improvements to existing homes - $1.970 billion

78. Assistance for adopted foster children - $0.880 billion

79. Tax credits for refueling property - $0.170 billion

80. Exclusion of interest for airport, dock, and similar bonds - $1.050 billion

81. New markets tax credit - $1.210 billion

82. Adoption credit and exclusion - $0.870 billion

83. Deductibility of casualty losses - $0.000 billion

84. Exclusion of public assistance benefits (normal tax method) - $0.760 billion

85. Exclusion of interest on owner-occupied mortgage subsidy bonds - $0.880 billion

86. Exclusion of certain foster care payments - $0.500 billion

87. Deferral of interest on U.S. savings bonds - $0.820 billion

88. Advanced energy property credit - $0.260 billion

89. Work opportunity tax credit - $2.070 billion

90. Tax incentives for preservation of historic structures - $0.710 billion

91. Allowance of deduction for certain energy-efficient commercial building property - $0.430 billion

92. Distributions from retirement plans for premiums for health and long-term care insurance - $0.470 billion

93. Special Blue Cross/Blue Shield tax benefits - $0.370 billion

94. Exclusion for employer-provided transit passes - $0.369 billion.

95. Tax exemption of insurance income earned by tax-exempt organizations - $0.370 billion

96. Exclusion of certain allowances for Federal employees abroad - $0.280 billion

97. Qualified school construction bonds - $0.490 billion

98. Depreciation of buildings other than rental housing (normal tax method) - $0.920 billion

99. Excess of percentage over cost depletion, nonfuel minerals - $0.310 billion

100. Zero-emission nuclear power production credit - $0.000 billion

101. Expensing of certain multiperiod production costs - $0.250 billion

102. Expensing of multiperiod timber growing costs - $0.260 billion

103. Exclusion of interest on bonds for water, sewage, and hazardous waste facilities - $0.290 billion

104. Exclusion of military disability pensions - $0.200 billion

105. Special Employee Stock Ownership Plan (ESOP) rules - $0.220 billion

106. Discharge of student loan indebtedness - $0.100 billion

107. Small employer pension plan startup credit - $0.000 billion

108. Credit for construction of new energy-efficient homes - $0.280 billion

109. Income averaging for farmers - $0.210 billion

110. Exclusion of railroad retirement (Social Security equivalent) benefits - $0.300 billion

111. Capital gains treatment of certain timber income - $0.150 billion

112. Exclusion of veterans pensions - $0.220 billion

113. Advanced nuclear power production credit - $0.030

114. Expensing of exploration and development costs, oil and gas - $0.700 billion

115. Special deduction for teacher expenses - $0.160 billion

116. Reduced tax rate for nuclear decommissioning funds - $0.120 billion

117. Amortize all geological and geophysical expenditures over 2 years - $0.140 billion.

118. Exclusion of interest on student-loan bonds - $0.150 billion

119. Expensing of certain capital outlays - $0.120 billion.

120. Excess of percentage over cost depletion, coal - $0.090 billion

121. Recovery rebate credits - $3.460 billion

122. Exemption of certain mutuals' and cooperatives' income - $0.100 billion

123. Exclusion of interest on bonds for Highway Projects and rail-truck transfer facilities - $0.140 billion

124. Tonnage tax - $0.100 billion

125. Marginal wells credit - $0.190 billion

126. Ordinary income treatment of loss from small business corporation stock sale - $0.070 billion

127. Expensing of reforestation expenditures - $0.060 billion

128. Exceptions from imputed interest rules - $0.060 billion

129. Exclusion of interest on veterans housing bonds - $0.080 billion

130. Credit for holding clean renewable energy bonds - $0.070 billion

131. Treatment of loans forgiven for solvent farmers - $0.060 billion

132. Exclusion of interest on small issue bonds - $0.060 billion

133. Deduction for endangered species recovery expenditures - $0.030 billion

134. Credit to holders of Gulf and Midwest Tax Credit Bonds - $0.100 billion

135. Additional deduction for the blind - $0.050 billion

136. Income of trusts to finance supplementary unemployment benefits - $0.040 billion

137. Recovery Zone Bonds - $0.090 billion

138. Capital gains treatment of royalties on coal - $0.050 billion

139. Exclusion of interest on savings bonds redeemed to finance educational expenses - $0.040 billion

140. Empowerment zones - $0.090 billion

141. Credit for holders of zone academy bonds - $0.090 billion

142. Discharge of business indebtedness - -$0.010 billion

143. Exclusion of utility conservation subsidies - $0.050 billion

144. Discharge of mortgage indebtedness - $0.220 billion

145. Qualified energy conservation bonds - $0.030 billion

146. Employer-provided child care credit - $0.020 billion

147. Tax credit for certain expenditures for maintaining railroad tracks - $0.130 billion

148. Deferral of gain on sale of farm refiners - $0.015 billion

149. Expensing of exploration and development costs, nonfuel minerals - $0.070 billion

150. Disaster employee retention credit - $0.050 billion

151. Expensing of exploration and development costs, coal - $0.050 billion

152. Exclusion of special benefits for disabled coal miners - $0.020 billion

153. Indian employment credit - $0.030 billion

154. Exception from passive loss limitation for working interests in oil and gas properties - $0.010 billion

155. Deferral of tax on shipping companies - $0.010 billion

156. Tribal Economic Development Bonds - $0.010 billion

157. Credit for disabled access expenditures - $0.010 billion

158. Exclusion of interest on energy facility bonds - $0.000 billion

159. Alcohol fuel credits - $0.020 billion

160. Bio-diesel and small agri-biodiesel producer tax credits - $0.020 billion

161. Credit for employee health insurance expenses of small business - $0.010 billion

162. Enhanced oil recovery credit - $0.000 billion

163. Credit for family and sick leave taken by self-employed individuals - $0.520 billion

164. Other Dependent Tax Credit - $0.000 billion

165. Build America Bonds - $0.000 billion.

166. Special rules for certain film and TV production - $0.100 billion

167. Opportunity Zones - $2.080 billion

168. Accelerated depreciation of machinery and equipment (normal tax method) - $10.430 billion

169. Expensing of research and experimentation expenditures (normal tax method) - -$38.660 billion

Clearly, not all of these can or should be eliminated, but the vast majority should. To point to just three opportunities for consolidation:

• Our fragmented array of complicated healthcare tax breaks, which are far from guaranteeing universal affordable access to care, would be better replaced with a single simple health insurance subsidy, done external to the tax code.

• Our various accelerated depreciation schemes and special investment tax breaks would be best replaced by a blanket deduction for all investment costs of all varieties (full expensing).

• Our litany of tax exclusions for government-provided benefits would be better replaced by a single large tax exclusion for all government-provided entitlement benefits.

Simplicity does not require us to abandon the aspirations of our tax code, nor does it require us to give up progressive tax brackets, as many on the right have claimed. What it requires is taking up a large and politically challenging task, one that will put us at odds with a powerful army of special interest groups.

Difficult as that might be, it's a worthwhile priority and one essential for curbing the unsustainable budget deficit we are currently faced with.