The biggest obstacle to tax reform? You are

17 hrs.

John Schoen , NBC News

If Congress and the White House would just fix the tax code - by getting rid of decades of deductions, exemptions and other giveaways ? they could lower tax rates and balance the federal budget.

It sounds like a great idea - until the loophole that's closed is the one that puts money in your pocket.

That?s one big reason Congress?and the White House have been unable to agree on broad-based tax reform for decades.

?Everybody loves to talk about it: ?All we have to do is broaden the tax base, cut all the loopholes and lower tax rates,'?? said Nick Kasprak, an analyst at the Tax Foundation. ?It sounds nice when you don?t get specific about it. But as soon as you start taking about specifics, whatever interest group is behind that tax break is going to fight tooth and nail to keep it.?

Though many Americans think their?taxes are too high, they often overlook how much money they get back from the government ? or avoid paying altogether ? thanks to a long list of deductions, credits and exemptions that make preparing a tax return such an arduous task. From tax-free savings accounts to deductions for gifts to charities, these uncollected taxes amount to a giant pile of stealth government spending.

Some of these tax breaks came about as accidents ? overlooked, unintended consequences of other changes in the tax law. Others were fought for by lobbyists representing industries like home builders or health care providers who benefit directly and indirectly from the?spending and investment incentives created by these tax?provisions.

That?s not surprising, given the amount of money at stake. In 2012, tax breaks?totaled?more than $800 billion? or about one-third of federal revenues. That?s more than the government spends on Social Security, or Medicare or national defense, according to the Congressional Budget Office. Cutting back on those givebacks would go a?long way toward closing the $1.1 trillion deficit.

But that won?t be easy. While voters consistently tell pollsters they strongly support efforts to balance the federal budget, they're equally strong in support of popular?tax deductions for things like home mortgage interest and donations to their favorite charities. No elected official wants to take them away. ?

And while many voters would be happy to?eliminate tax breaks for the wealthy or big corporations, the big money is in tax breaks that hit the largest number of voters ? from a generous package of?deductions for homeowners to the tax-free treatment of health insurance premiums paid by employers.

Proponents of eliminating tax breaks and loopholes argue that doing so would make the system?more fair. ?While providing benefit to a long list of individual taxpayers, they spread the money around unevenly. Homeowners get a basketful of?breaks, for example, while?renters get nothing.

In general, higher-income taxpayers are the biggest winners in the tax break sweepstakes, both because they have more income tax to avoid and because they?re more likely to benefit from the activities targeted by these breaks - owning a house, getting health insurance from an employer or opening? tax deferred retirement account.

But the benefits tend to level off for those at the very highest income levels, because they tend to spend a lower portion of their overall income on areas that are subsidized, according to a study by the Tax Policy Center.

Here are the biggest tax breaks ? and the amount of cash?Uncle Sam would save if they were eliminated.

Health Care:

Insurance premiums:?The biggest single tax break, by far, comes from the subsidy paid for health insurance ?paid by companies for their employees. (The premium paid on your behalf?amounts to income, but?doesn't?show up that way on your tax return, so you don?t pay taxes on it.) Uncle Sam gets hit twice on this one; not only do you pay no tax, your employer gets to deduct premium payments from the company?s tax return. Annual cost:??$180 billion.

Other medical expenses ? those paid out of pocket ? are also deductible, at a cost of $10 billion in uncollected taxes. If you?re self-employed, you get to deduct health insurance premiums, for?another?$6 billion.

Total annual cost: $196 billion

Homeownership:

Mortgage Interest: The government provides all kinds of incentives to buy a house ? including the Federal Reserve?s recent fire sale on mortgage rates. But the biggest, and costliest to the Treasury, is the tax break on interest paid on money borrowed to buy a home. If you?re in, say the 28 percent tax bracket, you get back 28 cents of every dollar you pay in mortgage interest. Last year those pennies added up to roughly 11 percent of the total federal budget deficit. Cost: $101 billion.

Imputed Rent: This is another tax break that favors homeowners over renters. If you own a home, you probably don?t pay yourself rent. But you benefit you derive from the use of your house is worth just as much as a renter would pay. That income ? known as ?imputed rent? ??isn't?taxed. If it were, the revenue generated would pay for about 5 percent of the deficit. Cost: $51 billion.

Capital gains exclusion: When it comes time to sell your house, you may walk away with more than you paid for it. On most investments, you?d pay capital gains tax on the entire profit. But a portion of your capital gain on a home is excluded from capital gains tax. Cost: $23 billion.

Property tax deduction: No one likes to pay income taxes on money they earned to pay other taxes. In the case of property tax on a home you live in, you get a break. Cost: $22 billion.

Total annual cost: $197 billion

Savings, investment and retirement:

Capital Gains and Dividends: Some critics of these investment taxes argue they should be abolished altogether: the current tax code splits the difference by taxing them at a lower rate than ordinary income. That difference ? the cost to the government of lowering the rate ? largely benefits high-income households. In 2011, about three-fourths of the benefit of this tax break went to the top 1 percent of U.S. households. Cost: $77 billion.

Retirement plans: If you participate in a savings plan at work ? like a 401(k) or IRA ? you don?t have to pay taxes on the money you put into the account and, in many cases, the tax on investment gains is postponed until you retire and begin spending it. Cost: $62 billion.

If you?re in a defined-benefit pension plan ? where your employer contributes and you get a monthly check when you retire ? those contributions are also not taxed. Cost: $52 billion.

Investments: You don?t pay taxes on the interest earned on life insurance savings ($25 billion) or on municipal bonds ($36 billion). And when you die, any investment gains on money you leave to your heirs?doesn't?get taxed. ($24 billion).

Total cost: $276 billion

Other big tax breaks:

Charitable donations:?The tax code encourages people to give to their favorite charities, including nonprofit schools, health care providers, and other service organizations. This is another tax break that tends to benefit wealthy taxpayers.?Cost: $49 billion.

State and local taxes: On top of federal taxes, most people also pay state and local taxes, including income and sales taxes. Every tax dollar you paid to another jurisdiction is a dollar you get to exclude from federal taxes.?Cost: $46 billion.

Source: http://www.nbcnews.com/business/economywatch/biggest-obstacle-tax-reform-you-are-1C7038051

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