If you're scrambling to finish your taxes this weekend, we wanted to remind you of a few breaks you might have missed. Unfortunately, unless you have a lobbyist advocating for your special interest, some of these may not apply to you.

First, don't forget to expense any tertiary injectants you used last year. Oh, you get a credit for your intangible drilling costs, too. You wouldn't believe how people still forget that one even though it's been in the code since 1918. Fare badly with ponies or dice? Gambling losses are deductible. So are your state and local income taxes. Don't have any state and local income taxes? Not to worry — even though they got rid of it in the landmark 1986 tax reform, Congress made changes in 2004 allowing you to deduct state sales tax instead. And if you caused a massive oil spill, you can write off the losses.

Accelerated depreciation for improvements you made at the motorsports complex (aka NASCAR track) expired at the end of 2011. So did your ability to deduct food donations that “may not be readily marketable due to appearance, age, freshness (or) grade.” But don't fret, you can still take them on this year's returns, and lobbyists are hard at work to make it so you will be able to take advantage of these breaks again in 2013.

Lobbyists are also working hard to get new breaks (known as tax expenditures) into the system. One particularly aggressive effort would allow you to write off purchase or manufacture of a natural gas fueled vehicle. And despite his pledge in the 2011 State of the Union to simplify the tax code, President Obama proposed a litany of tax breaks piled on top of existing manufacturing tax credits in the 2012 version. So, move manufacturing operations to the United States and you get a bonus break — if they're high tech, they're doubled.

Yet we don't even know if our current tax breaks actually achieve their intended goals. Even some of the most popular ones don't do what most people think they do. For instance, the deductibility of interest payments on a mortgage was justified on the basis that it encourages home ownership and makes it more affordable. The reality is the tax savings are already baked into the purchase price. So it benefits homebuilders and realtors, but homeowners, you're just paying more for the same house. To make matters worse, it's regressive: The break is available on first or second home mortgages of up $1 million — add in another $100,000 for improvements. There aren't that many people walking around with million dollar mortgages, but if you are, you're likely in a higher tax bracket, so the deduction is worth even more to you because it reduces your taxable income at your marginal (highest) tax rate.

All of this is to demonstrate that the tax code has become hopelessly byzantine and that special interests are constantly trolling to catch new breaks or exploit loopholes. We need a fire to rage through the thicket in the tax code and eliminate the underbrush of the various tax expenditures. According to the Joint Committee on Taxation, these various provisions reduce revenue to the federal government by more than $1 trillion every year.

Lawmakers need to come together to craft reform that would make the code simpler, flatter, and fairer. To date, policymakers have talked vaguely about eliminating some tax expenditures to achieve very specific lower tax rates. In reality, we need to specifically eliminate tax expenditures and set the tax rates accordingly for revenue-positive reform. Because there is such a thing as tax entropy, and just like a new weed springs up the day after you weeded your garden, you can be sure that tax expenditures will start creeping into the code shortly after reform.

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TCS Quote of the Week

“I find it interesting that the Congress of the United States gave us the parameters and we responded to it. What would you have us do? Do I wish that the top line was different? Sure, I wish Christmas would come every day, but the reality is the country has trillion dollar deficits to deal with.” — Gen. Norton Schwartz responding to claims that the military's generals had lied to Congress when testifying in support of this year's reduced defense budget submission. (military.com)