South By North Strategies, Ltd.

Suzanne Mettler asks why tax expenditures are not part of the debate about deficit reduction.

When viewed with even a small dose of historical perspective, the unquestioned immunity of tax expenditures to reductions is incredible given what’s at stake. Moreover, it demonstrates how dramatically our politics have changed in a space of less than two decades. From the Reagan era through Bowles-Simpson, bipartisan commissions charged with finding means of reducing spending have agreed that such policies should be scaled back as a means to increase federal revenues. Fiscal conservatives of yesteryear criticized tax expenditures for interfering with market forces. Far from epitomizing laissez faire economics, such policies actively involve government in altering market forces, subsidizing some industries to the exclusion of others. As a result, they promote the consumption of goods and services in some areas, such as health care and housing, generating artificial increases in prices.