The President's Commission on Tax Reform has just started to meet, and Rent-seeking has started. ICBA has already come out to eliminate Credit Union preference:
New Study Finds No Good Reason for $30 Billion Credit Union Tax Exemption
Tax Foundation Study
The Charge states that Credit Unions do not provide cheaper or more accessible loans for low-Income families through the Tax Credit, and Credit Unions only use the Tax Credit to enhance their equity. The Bankers want to limit the expansion of Credit Unions.
The Self-Employed want easier and fuller deduction of Home office expenses by forwarding of Suggestions to the Commission. The President has already intervened, stating he would protect the mortgage credit. Any consideration of Tax Reform will bring Calls for new tax credits, deductions, and exemptions from all Corners of the American economy.
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The Prisoner's Dilemma:
Everyone would be better off, if there were genuine Tax Reform: elimination of extraordinary tax credits, exemptions, and deductions; a position which would allow for lower Tax rates, and greater equity fairness of Taxation. The trouble comes from the fact a specific written Tax credit for an individual concern or industry will lead to greater advantage to the concern or industry, especially if the Tax Reform elicits Tax rate reductions. Individual Concerns or industries who do not seek special Tax credits will be injured by the special Tax credits granted to others, especially if the Tax Reform does not generate Tax rate reductions; their only redress being to seek a special Tax credit for themselves. They may all seek special Tax considerations for themselves, in which Case, All will be worse off due to higher Tax rates or greater indebtedness of Government.
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