I don’t think anybody claimed that purpose of the corporate tax cut was to really eliminate deduction, it was a straight corporate tax cut. On the individual side depending who you listen to it was either a cut Trump, or a reform and cut Ryan.
I won’t go point by point on the list of corporate loopholes. But pretty much any of the loopholes that include the word “foreign” are now pretty much irrelevant. At 21% the US corporate rate is slightly below average with a lot of countries cluster in the 20-25% and most of the rest in the 15-20% and a few like Japan and France just over 30%. It requires a lot of political capital to lower corporate rates in a democracy (e.g USA 2017). I have a friend who has intimate knowledge of the Japanese attempts to lower their corporate rate, this is hard to do. So I don’t expect in the next couple of years to see the large countries making a giant cut in their rate.
As @AK_Icebear say subsidies are politically harder than tax deductions. The reality is the 21st century. If we spend a trillion dollars to give health care insurance to the poor, buy new weapons systems, or cut corporate rates, in all case corporations end up with more money, and we add another trillion dollars to our growing debt. The rest of discussion is which has the better stimulative effect on the economy and we have many threads for those discussions.
The big challenge with any corporate tax law is defining profits, unlike in the case of an individual where I think individuals should tax almost entirely on their gross income and family size, it is very important that we tax business solely on their profits. We also have to recognize that there is startup cost, business cycles, and individual companies will fall on hard times. So that means if companies are unprofitable some year, those losses can be carried forward to reduce the taxes in the profitable years. Otherwise, nobody would invest in start-ups.
But most of all it is important to recognize that businesses have different cost structure a retailer like Costco only marks up the product they by 15%. A normal retailer doubles the prices, and jewelry or furniture store often triple the price. On the other hand the cost to distribute a digital game is barely a penny and even if you add in support cost probably less than $1/customer, but development costs are in the tens of millions.
The majority of corporate loopholes are simply a recognition that are costs associated with running a business. Delivery trucks don’t last forever, nor do oil fields. An accurate accounting of profits recognizes that both of the assets depreciate and will need to be replaced. If you want to call them loopholes fine, but I think they are a legitimate business expense which helps make the tax code fairer for a wide variety of business.
That said there are lots of industry and even company-specific loopholes in the tax code which should be looked at. But I suspect that while the intention is good, they very may well be like ending earmarks and not work out as well we hope. The cynic in me says if some Senator got Exxon a loophole 50 years ago, we should at least make the bastards payoff a new group of Senators :-).
