| This paper will examine how politics has contributed to the increase in subsidies and services to its citizens by influencing federal tax policy. First, I will provide a brief overview of tax policy in the United States. Starting with the Federalist period of limited federal tax powers to today's complex federal tax code. Next, the paper will examine the political and economic uses of tax exemptions and tax deductions. To show the impact of tax expenditures the paper gives an example of how the mortgage interest deduction affects the taxes paid by homeowners versus renters. The paper will then examine the politics behind some of the successes and failures of special interest, individuals and politicians. Finally, the paper will show specifically how special interest groups such as MADD, Common Cause, and the alcohol industry have influenced alcohol excise taxes and how the National Association of Realtors has influenced the mortgage interest deduction. |
