Tax Tyranny

The larger political obstacle is that people don't want to surrender the concrete tax breaks of a complex system for the abstract advantages of a simpler system. Those advantages are diffuse and deferred; they go mainly to the nation as a whole. Meanwhile, tax breaks are identifiable and immediate; they go mainly to individuals. Suppose the mortgage-interest deduction causes people to overinvest in extra-large homes, as it surely does. The country would be better off if—absent the tax subsidies—people diverted more money into other productive investments.