Not sure it could be classified as a loophole really. Unless your an employee or affiliate of the newspaper itself in which case it likely verges on fraud.
It's more like a government-led incentive scheme to support.
In general I think that if the State wants to support some activity it should do so directly by allocating funds, not by making the tax system more complex. The introduction of the GST consumption tax in NZ was admirable in this respect: prior to it there were layers of sales taxes and special tweaks to try to promote specific industries, so the final price at a checkout could be dismayingly more than the sum of the shelf prices. With GST there was a single tax rate, no retail exceptions, and no "sticker shock" since quoting tax-exclusive prices in retail was illegal. About the same time the personal income tax mechanism became simple enough that for ordinary employees four sides of A4 sufficed, completed in half an hour. Bliss! (normalised to expectations of bureaucracy)
A contrasting system: once I bought a T-shirt at a general store in Scotland and having paid the shopkeeper said genially "you won't be needing that any more" and snipped a small cloth loop from between the shoulders, explaining that in doing so he had converted it from a child's pinafore (VAT rate 0%) to a man's T-shirt (17.5% at the time). I want to live in a country where all children are adequately clothed but it seems to me simpler to fund that directly, e.g. via a benefit for those with dependent children, possibly income-tested. If the concern is that the "feckless poor" will just waste the money then I'd question (a) whether this popular demon is actually so common and (b) whether such people switch from proper parenting to wastreldom on the basis of a one-fifth price increase.
I strongly oppose income/means testing for many reasons: weird unintended consequences at edge cases and extra hoops to jump through. I'd much rather we all pay more in taxes to pay for everyone without means testing.
What really matters is the effective marginal tax rate.
So it doesn't really matter whether we means test taxes only, or whether we also means test cash benefits. The former is simpler, as you suggest.
You can make the latter work without weird edge cases; but it's more work to keep everything consistent.
(Income tax is paid as a function of income. In that sense, it's already means tested. For the argument I am making is doesn't matter whether that function is linear or convex, ie whether we have a 'flat' income tax or a progressive one.
A tax that's fixed per head would not count as means tested.
Whether you'd want to call a sales tax means tested is debatable. Your absolute sales tax burden goes up with your consumption, but not directly with your income.)
Agree with your points on tax simplification in general but I think for deductions it depends on the use case. In the examples of a local newspaper or a charity it has the added benefits of (a) introducing a level of competition which presumably would help keep things a little more optimised and (b) giving the citizen the choice on what they can fund.
Another example I came across recently was a corporate tax break for funding vocational education. The rationale being that the corporate looking to maximise their gains would sponsor graduates that could work for them, indirectly aligning curriculums with industry and increasing graduate employment rates.
I'd rather see a carbon tax than eg photovoltaic subsidies.
The latter requires picking winners, and the recipients need to interact with bureaucracy to claim. The former rewards simply consuming less just as much as eg switching to renewables; and you don't need a lawyer to claim your (relative) rewards of lower taxes.
You can tie subsidies to the "amount of CO2 spared compared to the average". Carbon tax creates the moral hazard of normalizing pollution, as long as you pay your tax.
But due to the higher costs, all but the wealthiest will be "forced" into making changes to their patterns. There was a recent Planet Money episode about these Pigouvian taxes[1].
"[A]mount of CO2 spared compared to the average" seems to be hard to define: if I burn lots of natural gas to create electricity, I release less natural gas than if I burn coal. But I release more than if I had managed to make do without that electricity.
But yes, a carbon tax is exactly that: if you pay your tax, releasing CO2 is legally and morally fine.
There's a certain amount that we can safely release. (That amount is smaller than what we release today.) The climate doesn't care about who's releasing CO2. So we use willingness to pay taxes to ration out that limited supply of allowable CO2 emissions.
Eg your fear seems to be that rich people can just buy indulgences and keep sinning, instead of having to repent? I say compared to giving every person an equal share of allowable emissions directly, I'm happy to personally emit a bit less, and have some ultra rich person indulge in return for them paying crazy amounts of taxes. I don't care about their moral fibre as long as they pay up.
If too many people decide to just pay the tax instead of cut their emissions, we'd need to adjust the tax rate. Because of inflation, population growth, advances of science etc, we would want to revise the tax rate every once in a while anyway.
(A cap-and-trade system would do that adjustment of the price automatically, but it seems that in practice it's hard for politicians to refrain from handing out permits for free and handing out too many. Eg the EU system would have worked better, if all permits would have been auctioned off by the government instead of being handed out to previous polluters for free.)
It's more like a government-led incentive scheme to support.