Tax Breaks Exceed $1 Trillion, Report Says A congressional report detailing the value of major tax breaks shows they amount to more than $1 trillion a year - roughly the size of the annual federal budget deficit - and benefit wide swaths of the population. The figures could be useful to lawmakers of both parties and President Obama, who are looking for ways to shrink future deficits and offset the anticipated cost of overhauling the much-criticized U.S. tax code, an effort likely to include tax-rate cuts. Both parties are looking to trim or eliminate tax breaks to achieve those goals. Obama has suggested eliminating breaks for corporate jets and oil and gas companies to reduce deficits. He also has raised the possibility of reducing tax breaks for U.S. multinationals that ship jobs overseas, as a way to offset the cost of lowering the corporate tax rate to 28% from the current 35%. The new report, by the nonpartisan Congressional Research Service, underscores how far-reaching many of the tax breaks are, which makes changing them a politically daunting task. They include the exclusion from taxable income for employer-provided health insurance, the biggest break, at $164.2 billion a year in 2014; the exclusion for employer-provided pensions, the second-biggest, at $162.7 billion; and the exclusions for Medicare and Social Security benefits. Other big breaks include the mortgage-interest deduction, third-largest; taxing capital-gains income at lower rates than other income; the earned-income credit for the working poor; and deductions for state and local taxes. The report, citing political opposition, technical challenges and other reasons, said that "it may prove difficult to gain more than $100 billion to $150 billion in additional tax revenues" by eliminating tax breaks. That likely would leave little for reducing tax rates, perhaps only enough for one or two percentage points in the top individual rate, while maintaining the same level of revenue, the report said. House Republicans dismissed the report's significance, saying it only confirms that overhauling the tax code will be politically challenging. They pointed to the work of Mr. Obama's 2010 deficit-reduction panel, co-chaired by former White House chief of staff Erskine Bowles and former Sen. Alan Simpson, as evidence that large-scale tax changes are possible. Please click here for the entire article at WSJ.com