The deadline for filing your federal tax return cometh. While DC’s observance of Emancipation Day gives individual filers a reprieve until Monday the 18th, for many special interests the tax day of reckoning never comes. While you fret over your taxes, Congress should be focusing on real tax reform. Righting our nation’s fiscal ship requires better aligning our spending hunger with a tax code we can stomach.

One key to fiscal responsibility is a fair and well-functioning tax code. Partially, it’s just math. Deficits arise and national debt accumulates when the cost of federal programs exceeds federal revenue. Lack of revenue inhibits flexibility to respond when crises occur. The country also needs to be able to invest in infrastructure and adaptation to maintain economic growth.

Like spending decisions, how the tax code is structured is a reflection of values. The tax code should be fair and equitable. By setting rates and implementing credits, deductions, and making distinctions between sources of income or behavior, lawmakers incentivize certain choices while discouraging others. Tax expenditures, including credits and deductions, all lead to reductions in revenue. This foregone revenue affects deficits much the same way as annual or mandatory spending programs.

While it’s often stated the only two inevitabilities in life are death and taxes, the details on taxes are too often amorphous. For one, much of the tax code is “temporary.” The bulk of changes affecting individuals (as opposed to businesses) in the 2017 Tax Cut bill adopted by Republicans expire in 2025. This means at the stroke of midnight, individual tax rates will increase and a number of deductions disappear, at least on paper. These “expirations” are used to hide the costs when scoring legislation. It was a trick employed by President Bush in 2001 and 2003 and revived when those changes were set to expire under President Obama. This accounting gimmick is used even though we know lawmakers won’t let the expirations happen. Defending yourself from a campaign ad attacking you for raising taxes by pointing out it wasn’t an increase but a reversion to the permanent rates? Yeah, not gonna work. It’s in this area where we truly need reform.

Taxpayers need tax reform that is honest. One of the most egregious areas of budgetary dishonesty is tax extenders. Tax extenders are a collection of special interest breaks that are permanently “temporary” on an even shorter basis than the underlying tax code. That is, they are often enacted for only one or two years. In calculating their cost, bill writers only have to account for cost impacts from the year or two the provision is authorized. But when the date of expiration is near, these breaks are extended, again, usually for just one or two years. In some cases, the extension is retroactive. They are effectively permanent. They also seldom get much scrutiny. Instead, tax extenders packages are attached to must pass legislation including the bank bailout in 2008, the 2010 extension of Bush tax cuts, and the grand bargain to avoid the 2013 fiscal cliff.

There are a lot of them. Many of them have been around for decades. There are dozens of energy related extenders and other carveouts that affect climate change. So many that we’ll dedicate next week’s Weekly Wastebasket to discussing them. Many of the non-energy extenders are very parochial. Treating investments in motorsports complexes (aka NASCAR tracks) differently. Expensing racehorses after three years (like they have no value after the Triple Crown run). Rebating rum excise taxes to Puerto Rico and the U.S. Virgin Islands. There are also new ones. The Advanced Child Tax Credit that sent monthly checks to folks claiming the Child Tax Credit. The current deductibility of charitable contributions for non-itemizers, to name a couple. You can bet there will be a fight to extend these.

Reining in extenders is fiscally responsible and will help achieve public policy goals. If they serve the public interest, they need to be a part of the Code. We should budget for them instead of pretending they don’t have significant long-term costs. The status quo, however, is fiscally irresponsible. Tax breaks like those for biodiesel have historically been extended retroactively, meaning a whole year, or part of a year, passes by without the tax credit in place. Congress then turns around and enacts a retroactive extension, attempting to incentivize more production of biodiesel, in this case, that’s already been produced. If our tax code is going to achieve its goals, good or bad, we need a better process at a minimum. You can’t incentivize behavior that already happened one or two years ago. Some tax breaks also clearly reward special interests and in effect cost taxpayers billions each year. If a provision is in the public interest, fine, let’s have it. But when a narrow tax provision is wasteful, distorting markets, or leading to unintended consequences, it should be eliminated.

In sum, we need a more stable, predictable, and equitable tax code. One that promotes common sense over special interests. Stay tuned next week as we dive in a bit more.