Here's an interesting, if unsurprising, survey experiment. Brandon Bartels and Jake Haselswerdt polled a group of people to find out if they approved of a government program that would help people afford to own homes. It was presented in two different ways:
Option 1: We’re going to ask you your opinion on a government program intended to help Americans afford to own homes. Under this program, individuals who take out a mortgage to buy a home are eligible to deduct the monthly mortgage interest from their taxable income, thereby reducing their tax burden. The total savings for individuals under this program are estimated to be $94 billion for fiscal year 2011.
Option 2: We’re going to ask you your opinion on a government program intended to help Americans afford to own homes. Under this program, individuals who take out a mortgage to buy a home are eligible for a grant from the federal government to help them afford the monthly payment. The total government expenditures to individuals under this program are estimated to be $94 billion for fiscal year 2011.
A lot more people supported the tax deduction than the grant. That's not too surprising. What's a little more interesting, though, is that camouflaging this program as a tax deduction mostly affected conservatives. Liberals and conservatives both supported the tax deduction version at the same rate (an average of about 4.5 on a scale of 1-7), but when it was described as a grant, conservative approval plummeted while liberal approval dropped only a bit.
I suppose this isn't all that surprising either. After all, in the modern era tax expenditures have mostly been a dodge to win conservative approval for government spending programs. Apparently it's a pretty good dodge.