New York Times DealBook:  ‘Tax Extenders’ That Slip Under the Radar, by Victor Fleischer (Colorado):

The best tax loopholes hide in plain sight.

While the recent
fiscal negotiations focused mostly on changes to the top income rate,
the final bill (H.R. 8) contains a bonanza—52, to be exact—of what are
known as “tax extenders.” The tax extenders are temporary or permanent
extensions of special tax relief for particular industries or types of
investments.

Congress likes these tax extenders, which have come
to dominate the tax legislative process in recent years. The temporary
nature of extenders reduces their estimated costs; budget estimates
assume that the provisions will sunset as promised, instead of being
extended each year, as most in fact are.

In addition to finessing
the budget process, the annual ritual of enacting the tax extenders
gives Congress a regular opportunity to check in on favored industries
to see if they have been naughty or nice. As public scrutiny has led to a
decline of direct spending in the form of earmarks, indirect spending
through tax expenditures has become a more comfortable method of
extracting campaign donations from industry and doling out tax breaks in
return.

The worst tax extenders have gotten some unwanted media
attention. These include the special expensing rules for film and
television productions, NASCAR
venues and rum production, and creative tax breaks for both fossil
fuels and clean energy. But even the less offensive tax extenders, which
tend to slip under the radar, are questionable from a tax policy
perspective.

Consider the special provision for “qualified small business stock,”
which provides a zero percent tax rate on capital gains from certain
investments. A better name would be the “angel investor loophole.”