Suzanne Mettler had an interesting post yesterday at New Deal 2.0 entitled the “The Enshrined Entitlements of America’s Wealthy.” In it. she takes both political parties to task for their weak-kneed failure to tackle this genuine and largely hidden area of runaway spending.
“The super committee on deficit reduction has now disbanded without even having managed to agree on scaling back tax expenditures. These social welfare policies that are hidden in the tax code bestow their greatest benefits on high-income taxpayers, as I have shown elsewhere. They amount to over 7 percent of GDP, more than what we spend on either defense, Social Security, or Medicare and Medicaid combined, not to mention domestic discretionary programs, which cost far less than any of these.”
In case you’re wondering which programs she’s talking about, this is from her “as I have shown elsewhere” hyperlink:
“The three submerged policies that are most costly to the United States are the tax subsidies for employer-provided health and retirement benefits and the home mortgage interest deduction. Each of these three policies favors more affluent Americans, as seen in the figure below. In 2004, families with incomes of $100,000 or above—the top 15 percent of the income distribution—claimed 69 percent of the benefits of the home mortgage interest deduction, and 55 and 30 percent of the tax benefits associated with employer-provided retirement benefits and health benefits, respectively.”
But of course we mustn’t complain about such realities so as not to be enagaged in “class warfare.”