Ramesh Ponnuru has an interesting column at Bloomberg View warning against hopes that much revenue can be raised via the elimination of tax preferences:
The more closely you look at the tax code, the less promising the idea of broadening the base becomes. That may be why Mitt Romney’s campaign proposed imposing a cap on the total value of all deductions anyone can take (and why so many congressmen are now talking about the idea). It is more or less an admission that paring back the number and size of specific tax breaks is more political trouble than it is worth in revenue.
The Bowles-Simpson model of tax reform -- broadening the base and lowering rates -- is the wrong one. Some tax breaks should be scaled back, to be sure. But the idea that the federal government can painlessly raise a lot of money from a base- broadening tax reform is a myth.
Ponnuru has a higher opinion of the substantive merits of tax preferences than I do. But he's right about the political difficulties. The real core problem here though is the attempt to find more revenue from within the income-tax system itself. It's time to face up to the limits of the income tax as a revenue source - and to the outright harmfulness of the payroll tax - and to look instead to consumption taxes, value-added taxes, or energy/carbon taxes.
The US federal government collects about 42% of its revenues in the form of income taxes, and another 40% in the form of payroll taxes.
By interesting contrast, cross the European Union, governments average less than a 28% take from income taxes - and actually raise more from Value Added Taxes. Not to suggest European taxation as a model for anything, but only as a warning: income taxes have their limit.