As a child, I grew up with paint-by-number kits containing outlined shapes with numbers inside each one. The numbers indicated which color paint to use in each section, and as long as you followed directions, staying within the lines, you’d end up with a masterpiece.

These kits created the illusion that I could actually paint a work of art. True masterpieces are created, however, when you don’t restrict yourself to the numbers and staying within the lines.

In a seminal 1995 paper titled “Paint-by-Numbers Tax Lawmaking,” Yale University professor Michael Graetz describes how the tax lawmaking process in Congress is dominated by making the numbers look right for revenue and distribution tables.

Granted, the legislative process is one of give and take. Compromises must be made in politics, sometimes referred to as the art of the possible. However, the recently released Republican Tax Cuts and Jobs Act makes too many compromises in order to stay within the numbers and the lines, resulting in a bill that can no longer be considered tax “reform.” 

In fact, it’s a tax cut for some and a tax increase for others, especially those in the upper middle-class. Disappointingly, the bill retains many of the current inefficiencies and complexities of the current tax system. It’s far from a masterpiece.

The over-reliance on revenue and distribution tables led House Republicans to focus on the wrong questions from the start. Instead of asking how the tax system should be reformed to improve the financial well-being of the country and encourage economic growth over the long-term, reform ideas were hampered by the need to limit revenue implications for a short-term, 10-year period.

Moreover, tax distribution tables are but a snapshot with no accounting for income mobility over time. Trying to ensure that that high-income taxpayers don’t receive a tax break is next to impossible when the top 10 percent of income earners pay 70 percent of all federal income taxes.

Earlier this year, in a failed attempt for revenue neutrality, previous versions of the House Republican plan offered trillions in tax increases to pay for tax reductions. One such tax proposal, the Border Adjustment Tax, would have resulted in a $1.3-trillion tax increase on American consumers over 10 years.

The BAT was widely opposed and after several months of pushing the BAT, House Republican leadership finally abandoned the proposal. At that point, several months of inter-party fighting severely set back efforts to pass once-in-a-generation tax reform. 

Now, with less than two months remaining in the year, the resulting House Republican bill is an attempt to create a tax reform masterpiece that can reduce revenues by no more than $1.5 trillion over a 10-year period and avoid the perception that it’s a tax cut for the rich.

The bill released Nov. 1 is a mix of good and bad tax provisions forced into a bad marriage due to paint-by-numbers tax lawmaking. The bad provisions may yet sink the entire bill.

On the corporate tax side, the bill proposes permanently reducing the corporate income tax rate to 20 percent from 35 percent. This much-needed reduction will increase investment and spur economic growth. The bill also proposes full expensing, a provision allowing companies to expense or deduct the full cost of capital expenses in the year purchased, instead of having to write off, or depreciate, the cost over many years.

Expensing is supposed to provide a major boost to economic growth. Unfortunately, much of the long-term growth effects are muted because, in an attempt to make the revenue numbers work, the expensing provision is only good for five years before expiring.

The individual tax reform provisions in the bill are such a complete mish-mash of provisions designed to fit within revenue and distribution tables that it’s easy to play off the classic Clint Eastwood movie and list the good, the bad and the ugly.

On the good side, the bill repeals the Alternative Minimum Tax, which is very complex and snares many middle-class taxpayers into paying more in taxes than they owe under the regular income tax system. The bill also does a good job broadening the base by eliminating or curtailing various deductions and exemptions that create inefficiencies and complexity in the tax system. Further, the number of tax rates are reduced from seven to four.

Unfortunately, on the bad side, the simplification that could arise from reducing individual tax rates and broadening the base is muted by failing to completely remove many of the worse distortions, like the exclusion for employer-provided health insurance.

Also, in a purely ugly political ploy to make the tax distribution tables look better, the bill creates a large marriage penalty for many upper middle-class taxpayers.

The 25-percent tax bracket is the only bracket where the income threshold for married couples isn’t double that for single filers, which penalizes many married couples, pushing them into the 35-percent tax bracket. 

In another effort to make the tax distribution tables look better, the bill maintains the high 39.6-percent tax rate but applied on income over $500,000 for single filers and $1 million for married couples filing jointly.

While it may be politically popular to tax millionaires, the high tax rate encourages high-income earners to shift income from wages to capital gains, which are taxed at a lower rate, thus creating inefficiency and complexity.

While the Tax Cuts and Jobs Act is a good start, it’s not the tax reform America needs or deserves. Unless Republicans in the House and Senate abandon their reliance on using tax revenue and distribution tables for paint-by-numbers tax lawmaking, the chance at a once-in-a-generation tax reform will have to wait until the next generation.