GOP Tax Plan Goes After Tenacious Deductions We Don’t Need

There is something to like about the new House Republican tax bill. Note that I did not say "a lot to like." It looks very expensive, which Republicans will find challenging to pay for, and if they do not pay for it, it will expand the government budget deficit to dangerous levels. But gosh darn it if the Republicans have actually made some effort to eliminate deductions.Deductions are the Cheez Doodles of tax policy: Everyone who studies the matter knows they are not good for us; nonetheless, most people will get very indignant if you attempt to replace them with something more wholesome.This is why deductions rarely go away, no matter how stupid and detrimental to the fiscal and economic health of the republic. For example, virtually every wonk in Washington, from radical libertarian to fervent socialist, can agree upon at least one thing: The tax deductibility of employer-sponsored health insurance is a terrible idea. On the one hand, it costs the government a packet of money every year, money that has to be raised by higher taxes on someone else. On the other hand, it encourages employers to load as much compensation as possible into the health benefit package, which distorts our economy and contributes to ballooning costs.   Continue reading...