1. Conference tax bill will lead to massive tax planning and game-playing undermining income tax, benefiting well-advised, and likely leading leg to cost considerably more than estimates suggest. Updated report from tax experts across country: ssrn.com/abstract=30894…
2. Core prob: Unjustifiable loopholes and giveaways benefiting some activities, not others; some forms, but not others. Complex, unfair, inefficient—and gameable. Some examples from report:
3. The pass-through ded big loophole in itself to avoid top rate (20% off!) Lots of reporting how new bill now drives a big hole in previous Senate guardrail that had largely restricted to pships paying wages. Now, can get w/ just having property. bloomberg.com/news/articles/…
4. Creates addtl giveaway to ind like real estate w/ lots prop, few employees. There are incentives--if close to line--own rather than lease prop; maybe machines > employees. There’s bizarre, gameable prov giving credit based on initial cost of prop even if depreciated for years.
5. .@SenBobCorker and rest of Rs struggling to justify. But, this is just one example. Whole bill full of similar sloppily written provisions delivering targeted windfalls, encouraging gaming, generating unfairness, etc.
6. Staying on pass-throughs: If you’re an employee, you’re out of luck. Can’t get deduction. But, if making less than $315K for married couple (1/2 singles), appear to automatically get if sole prop. (e.g., indep. contractor) or partner in biz. Why?
7. Why discriminate against people who are employees? Why encourage firms/people to restructure or lie so employees become indep contractors or partners? No good reasons, but that’s what bill does.
8. For high paid partners in “bad” fields (lawyers, doctors), here’s game to access pass through ded: Buy your building. Own it in a REIT (automatic 20% ded on income). Overcharge the law/med practice. Strip out income from law/med. practice to take ded. h/t @vicfleischer
9. It’s a game based on unjustifiable distinction. Why Real Estate Investment Trust=good? Medical practice=bad?
10. Oh, and yeah. In new bill: architects and engineers (no longer on bad list) > doctors (on bad list). Why first have easier time than second getting deduction? Your guess is as good as mine.
11. Now, let’s take well-intentioned provision that just hasn’t been thought through enough: limitation on biz interest deduction. Key provision.
12. As @DanielJHemel explains, avoidable by pass throughs by simply restructuring interest expense as preferred return on equity.
13. Even avoidable by C-corps, by creating a new pship to finance activities that the C-Corp owns. Yes—this stuff gets complicated. Key point = Key rev raiser and policy may not work so well.
14. And plenty of other problems. C-corp can be used as tax shelter too. Pay 21% (a lot lower than 37% top rate) and avoid 2nd layer of tax for instance via step up in basis at death.
15. States being able to restructure taxes to keep deductibility. May be good thing, but at potentially large rev cost to federal Treasury not being taken into account.
16. Export subsidy focused on intellectual property that is gameable and inefficient (you really want to encourage manufacture abroad w/ that?) and not WTO compliant.
17. (1) Don’t pass this bill; provisions fatally flawed. (2) If bill passes, IRS will be outgunned, but do best to empower. Reverse cuts. # in IRS enforcement fallen by > 25 percent in recent years. Trump admin has prop further cut. Weak IRS will aggravate many sins of this bill. 
