Tax breaks: What's not to love?
Besides the facts that they help make the tax code unbearably complicated and many Americans can't benefit from them, of course.
The Pew Research Center tallied up all the “tax expenditures” — the official term for targeted tax breaks — in the U.S. tax code in a Monday report and calculated the cost to the government this year: more than $1.3 trillion.
That staggering figure isn't even close to complete, Pew noted, since the Congressional Joint Committee on Taxation only gives specific numbers for tax breaks that cost the government more than $50 million annually.
Many of the more than 200 “tax expenditures” on the books for 2015 fall below that threshold.
"Tax expenditures" are notably different from across-the-board tax cuts since they target different interest groups, be they large — say, homeowners — or small — say, people undergoing gender reassignment surgery.
The problem, as Pew and others have argued, is that all of these exemptions, deductions, credits and other special breaks usually wind up benefitting the rich at the expense of the poor and middle class.
Simply put, the rich pay more taxes in the first place, and they can afford to hire tax lawyers so they can fully capitalize on special breaks.
Poor folks are out because they don't pay much tax to begin with.
Middle class Americans are out because they don't have the time or money to navigate the Byzantine tax code.
Why doesn't the government scrap the system of special breaks and just tax everyone at lower rates? Why not a flat tax?
Probably because each affected interest group would kick up a fuss if their break was threatened.
But as Pew noted, a strong majority of Americans recognizes the current system has problems: 59 percent of Americans support completely revamping the U.S. tax code.
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