Obama may propose sweeping tax reform plan - The Oval: Tracking the Obama presidency Changing the tax code, as was last done in 1986 under Ronald Reagan, would involve a basic trade: Get rid of many, if not most, of the $1.1 trillion in tax breaks, exemptions and deductions built into the code, and use the money to lower tax rates. The 18-member bipartisan fiscal commission voted 11-7 for a deficit reduction plan that would wipe out nearly all those tax breaks, keeping only those for children and families, charities, health insurance and home mortgage interest. Some on the panel wanted to get rid of those as well. In return, tax rates would tumble, with the top rate dropping from 35% to no more than 29%. The panel would use some of the savings for deficit reduction as well.