Hi Ryan, nice to have you back.
"Efficiencies" resulting from use of private contractors are shared between the contractors and the public, as they should be. The contractors respond to an existing landscape, after all, and they know what the starting point is, and they bargain for as much of the "gain" as they can get. When there is a multiplicity of qualified contractors, it's a market operation. Nothing wrong with that, it is still more efficient than the gov alone could ever do.
"Of course tax cuts need to be financed. At the end of the day government spending has to be paid for and it will be paid one way or another." You seem to be mixing up ideas--tax cuts are never financed. As you say in the second part, programs are funded, either through spending (taxes) or borrowing (financing). The first part makes it sound like social programs are something inherent in the world, that they are eternal and inviolate, and that one way or another, they will be funded, because there is no alternative.
Clearly that's not true, but it is a prevalent attitude. As is obvious, both programs and taxation are expressions of social policy decisions, which social policy is fluid and can, and should, change over time. The attitude that social programs are somehow inherent in the world leads to conclusions like "In particular "tax preferences" (basically loopholes) is government spending in every way that matters.", which is a conclusion that gets cause and effect reversed.
On a detail matter, "tax preferences" are not the same thing as "loopholes". Whereas a loophole permits the avoidance of the social policy expressed in the provision in question, whereas tax preferences do exactly the opposite: they FURTHER the social policy expressed in the provision in question. What you derisively call "corporate entitlements" are simply expressions of agreed-upon social policy. Don't like them? Vote and work to get them changed--but like it or not, they are expressions of social policy from an elected Congress or President, every bit as much as are SS and Medicare programs ("personal entitlements")--in that narrow sense, they are philosophically identical, and IMO NEITHER of them should be mis-described as "entitlements".
If I may, you seem to be arguing against your own purpose a bit. I think you're confusing corporate structures with work, in this sense--you don't think there should be a personal income tax because, if I may, work should be rewarded and not punished--yet, you seem to advocate the taxation, and increased taxation, of corporate structures. While the corporate form of organization exists only at the behest of the government, it is just that--a form of organization: the organization of the activities of a group of people, ultimately all of which represents work, be it actual labor or capital.
You did identify relative to the individual taxation a distinction that is important, namely the taxation of consumption vs production. Corporate taxation is just another means of taxing production. While I agree with some degree of corporate taxation, I think it should be limited to the extent to which it can be targeted to paying for the activities of the corporation that have broader social costs--for instance, a mining company should be taxed sufficiently to pay for land/water remediation costs and management. The REAL, and inefficient and unconscionable, "corporate entitlements" are those that not only externalize such costs, but at the same time kick those costs down the road while both society and the corporate structure evolve and re-organize, which often increases the ultimate costs associated with the activity.
Again, one does not "finance" a decrease in taxation of productive activity--it is the TAXATION that finances the programs on which the funds are spent. The programs are not inviolate, they are not inherent in the world. We don't HAVE to fund them, in the same sense that we HAVE to breathe air or drink water. We MUST have air and water; we don't HAVE to have SS or Medicare. "Corporate entitlements" which are "financed", or paid for, by the general public, are those negative externalities that result from corporate activity, for which the public ultimately pays, and which could be paid for more efficiently, and sooner, by the corporate entity.
Yes there are many such externalities, but many such costs have been internalized through policy. As new industries evolve and existing ones change, policy will always be a step behind in its response. Recently we have gone through significant social changes, and policy has been slow to respond, and in that sense it could be argued that such "entitlements" have indeed been increasing--however, it would be impossible to determine conclusively if there has been a net increase or decrease over the past, say, 20 years. That call is left to one's personal judgment and experience.
SS and Medicare "finance" nothing. They produce nothing, and therefore create no wealth that can be represented by money, and are therefore incapable of "financing" anything. The position of primacy that productive activity occupies must be recognized and given favor over the lesser position that consumptive activity occupies. You seem to be in favor of this when you decry the taxation of personal income and advocate a VAT.