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| by Josh Freedman |
Are tax expenditures the core of economic security for the middle class, or are they loopholes to benefit the wealthy?
In a new piece for The Atlantic's business channel, Josh Freedman explores the distributional effects of the biggest tax expenditures, like the mortgage interest deduction and the employer health insurance exclusion, on the middle class. He finds that these tax expenditures are extremely regressive, but notes that the story is not quite as simple as it sounds and cautions against a rush to reforms that eliminate expenditures but fail to address the underlying problems.
Freedman writes: "Rather than defending current tax expenditures or focusing on reducing tax rates, the debate we should be having is how to create a "middle class welfare state" that actually works. If we are in an economic situation in which any action that would hurt the middle class is wrong, even if it is extremely regressive and inequitable, it should make us think that the overall welfare state for the middle class needs to be stronger."
The Tax-Break Myth: They're Not Really For the Middle Class by Josh Freedman in The Atlantic magazine online. http://www.theatlantic.com/business/archive/2012/11/the-tax-break-myth-theyre-not-really-for-the-middle-class/264388/
In a new piece for The Atlantic's business channel, Josh Freedman explores the distributional effects of the biggest tax expenditures, like the mortgage interest deduction and the employer health insurance exclusion, on the middle class. He finds that these tax expenditures are extremely regressive, but notes that the story is not quite as simple as it sounds and cautions against a rush to reforms that eliminate expenditures but fail to address the underlying problems.
Freedman writes: "Rather than defending current tax expenditures or focusing on reducing tax rates, the debate we should be having is how to create a "middle class welfare state" that actually works. If we are in an economic situation in which any action that would hurt the middle class is wrong, even if it is extremely regressive and inequitable, it should make us think that the overall welfare state for the middle class needs to be stronger."
The Tax-Break Myth: They're Not Really For the Middle Class by Josh Freedman in The Atlantic magazine online. http://www.theatlantic.com/business/archive/2012/11/the-tax-break-myth-theyre-not-really-for-the-middle-class/264388/
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