Don't look now, but the Senate is sort of rewriting the entire tax code. Max Baucus and Orrin Hatch are trying an ambitious "blank slate" approach to the code, throwing out every tax provision and putting the onus on their supporters to justify their continued existence—and they have just 15 days left to do it. So Politico decided to point out the most significant potential casualties in the purge:
- The mortgage interest deduction: It's currently the government's biggest tax expenditure, and it subsidizes homes that cost up to $1 million. "That's crazy," one tax expert said. Lawmakers are considering cutting that cap in half, but realty lobbyists will surely argue that the housing rebound is too fragile.
- Carried interest: This is the provision that lets Wall Street types like Mitt Romney pay the much lower capital gains tax on their income instead of normal income tax. But Democrats have been trying to kill it for years with little success.
- The wind production credit: Any break Republicans oppose is especially vulnerable, and this is one of them. It was already supposed to lapse last year, but was revived as part of the fiscal cliff deal.
- Corporate jets: Democrats have been hammering this tax break for years, believing that it's political gold. The actual break just allows corporations to write off jets faster than other kinds of aircraft, and lobbyists will surely argue that killing it will hurt manufacturers.
For more on each deduction, and one more we left out, check the
source. (More
tax code stories.)
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