The White House wants to include tax reform in the entitlement discussion, but the Republicans will only talk if that means closing loopholes and lowering rates:
Privately, House Republican leaders think they’ve checked two of the three boxes of a grand bargain: first, the Jan. 1 tax increases; second, the spending cuts via the sequester. Now, in their view, all that’s left is entitlement reform. Top Republicans are also skeptical Obama would agree to the kind of tax reform that House Republicans have drawn a firm line on: The revenue to be generated by closing loopholes would go to lowering rates.
Too bad this strategy is unpopular with just about everybody:
But any tax expenditures, or loopholes, worth undoing already enjoy huge support from the electorate.
Will anyone really eliminate the 401(k) exemption, which allows us to park tax-free dollars in a retirement fund? Or how about that mortgage-interest tax deduction, which allows us to deduct interest from our taxes, or the capital gains exclusion, which allows us to keep any profit we make on our homes? What about the deduction for state and local taxes? How about charitable deductions?