Do we all agree? Tax breaks add to the deficit.
Policymakers from both parties are starting to come up with the same solution to reduce the deficit: End tax breaks.
As David Callahan writes on Huffington Post (emphasis added):Skip to next paragraph
'EconomistMom' (Diane Lim Rogers) is Chief Economist of the Concord Coalition, a non-partisan, non-profit organization which advocates for fiscal responsibility, and the mom of four (amazing) kids to whom she dedicates her work. She’s been blogging since Mother’s Day 2008.
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Such steps [to broaden the tax base by reducing tax preferences, or "tax expenditures"] would command support from an unusual cast of characters. Many fiscal conservatives dislike offering a plethora of deductions in the tax code because it uses the tax system for “social engineering” and — in regard to corporate taxes — puts the government in the business of picking winners and losers. Meanwhile, progressives don’t care for key individual tax breaks because they mainly benefit high earners. Also, of course, progressives hate the billions in tax breaks given to oil companies and other corporations.
All in all, it is possible to imagine a bipartisan deficit reduction deal in which large new revenues are raised by closing loopholes. That is clearly where some members of the Gang of Six (now five) have been for weeks. Last month, Republican Senator Tom Coburn [the departing gang member] said on Meet the Press that he would favor a “net” increase in revenue if it didn’t raise tax rates.
It is even easier to imagine that scenario after a television appearance yesterday by Senate Minority Leader Mitch McConnell, who said that Republicans were dead set against higher tax rates. As reported by CNN.com: “Chris Wallace of Fox caught the distinction and asked McConnell if his language indicated he was open to collecting more tax revenue by ending some subsidies and loopholes. McConnell deflected the question, saying he wouldn’t negotiate a deal on the program.”
Maybe I’m naive, but that sounds like a clear signal that at least Senate Republicans would go along with a tax reform plan that raises revenue.
And incidentally, the Tax Policy Center’s Donald Marron has an excellent column on this very issue in this week’s print edition of the Christian Science Monitor–available online here–where he explains:
Here’s a shocker: America can cut government spending by eliminating tax breaks.