Can we abolish the use of the term loophole?
What we really mean is that a part of the tax code was written to allow [fill in the blank].
When we use the term loophole the suggestion is that it something unethical, illegal, or misused. The people who save taxes based on these regulations are just following the law. Nothing more or less. And, in fact, if a corporation did not use every deduction or exemption the managers and officers would be negligent in their fiduciary responsibility.
This is why we need to fix the regs, not get angry at people who follow them.
You're exactly right.
Not only that, but people who save taxes based on these regulations are doing EXACTLY what Congress and the President who signed the law want them to do.
The government decides to encourage people to buy homes by providing a tax deduction for home interest. Nobody deserves blame for doing exactly what the government intended.
The government decides to encourage investment in corporations by providing a lower tax rate on capital gains. Nobody deserves blame for doing exactly what the government intended.
If the government eliminated these two laws, I would sell stocks the day before the rates were to rise and pay off my home mortgage. Though this is what ought to be happening, if everybody did this on the same day it would be quite exciting. We are so constrained by these kinds of laws that there is no simple way to get back to the small-government that our Founders intended. It's going to be very painful.