Could tax reform lead to a more complex system?

Congressman Camp's discussion draft of the Tax Reform Act of 2014, released in February 2014 aims to broaden the income tax base and lower tax rates. Broadening the tax base means that some special deductions and credits could be eliminated. It also means that some deductions could be stretched out over longer periods. In the long run, that doesn't raise revenue as it is just timing. But when you only measure the effects out 10 years, it raises revenue.

One stretched out deduction would be advertising expenses of large companies. Under Camp's proposal, 50% would be deducted in the year incurred and the balance would be deducted over ten years. That might sound simple, but you need to dig deeper. This proposal will require a definition of advertising. Camp's is fairly complex. Also, the small business exception is a bit complicated.

I've got a short article in the AICPA Corporate Taxation Insider today (7/31/14). I explain the details of the proposal and include some examples that highlight some of the complexities. I also critique it against principles of good tax policy. The proposal fails.

What do you think?