The Agenda

Are the Big Tax Expenditures More Politically Vulnerable Than We Think?

I’m wary of reading too deeply into the latest Bloomberg Poll, but I was pleasantly surprised to see how respondents reacted to the following prompt:

Proposals to change the income tax system would reduce the overall rate you pay in exchange for also reducing or eliminating some tax deductions and credits. For each, please tell me if you would favor or oppose eliminating or reducing the deduction.

For the deduction for mortgage interest, 49 percent were in favor while 45 percent were opposed. A well-designed reform of the deduction could grow that number. And only 51 percent oppose paring back the exclusion of employer-paid health insurance premiums from your taxable income while 40 percent are in favor. That’s far from insurmountable, particularly if the reform in question is a well-designed refundable credit.

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