Here are a few things found browsing the web today, aided by Public Policy Matters, which serves up a daily review of current public policy issues.

• From the Reason Foundation, an interesting study of the home mortgage interest deduction and who benefits the most from its continued role in the federal tax code. Their argument is that the deduction primarily benefits higher income taxpayers and encourages them to buy higher priced homes because it increases their tax deduction. Elimination of the deduction would enable rates for all taxpayers to be reduced, according to this study.

The deduction of mortgage interest from federal income taxes subsidizes homeownership, making it more affordable to become a homeowner. It is a highly popular tax break, yet one that is not without criticism. For example, the mortgage interest deduction (MID) primarily benefits those who would choose to own homes anyway while encouraging them to simply buy bigger and more expensive homes. Those who are on the margin between renting and owning tend not to itemize deductions, thus they cannot benefit from the MID. As a result, if the goal is to increase the homeownership rate, the MID is an ineffective tool. Furthermore, it creates a distortion in the choice between financing owner-occupied housing with debt or other assets, and in the choice between investing in residential real estate or other assets.

…the mortgage interest deduction is almost exclusively claimed by households in the top income brackets and younger individuals with large mortgages who have not paid off much of their loans. Those with large mortgage debt and high marginal tax rates benefit the most from being able to itemize their deductions and write off much of their mortgage interest. At the same time, the MID does not provide a benefit to renters or to those with low incomes who do not itemize, nor much of a benefit to senior citizens with little mortgage debt.

• The National Institute on Money in State Politics issued a report on the political influence gained through political contributions from the natural gas industry in Pennsylvania, “the only energy producing state that lacks a specific tax on natural gas drilling.” “Names in the News: Pennsylvania’s Marcellus Shale Advisory Commission.”

From their press release:

As a candidate in the 2010 gubernatorial election, Tom Corbett ran on a platform opposing any form of tax on natural gas production. Donors in the oil and gas industry gave his campaign $1.3 million while only contributing $130,300 to his opponent Dan Onorato, who favored taxing the industry. The combined contributions from donors in the oil, gas, and mining industries were the fourth largest source of Corbett’s 2010 gubernatorial and attorney general campaign funds – contributing 9 percent of his combined $29.4 million total.

This spring, the Governor named a dozen oil and gas employees to his new Marcellus Shale Advisory Commission, tasked with determining a course of action for the development of Marcellus Shale. Of the Commission’s 30 members, 14 members and several of their spouses, almost all current or former oil and gas executives or lobbyists, contributed a combined total of $442,347 to Corbett’s campaigns for Attorney General (2004, 2008, 2010) and Governor (2010). Last week when the Commission issued their final recommendations for the development of Marcellus Shale they included no call for any type of state-level tax on the natural gas industry.

• From the ACLU, a report and recommendations regarding “the vast and systemic use of secrecy, including secret agencies, secret committees in Congress, a secret court and even secret laws, to keep government activities away from public scrutiny.”

“Drastic Measures Required” highlights the significant powers Congress holds under the Constitution to stem the tide of government secrecy: the authority to regulate the military and national security activities, as well as the tools to investigate executive branch authorities. The report lays out specific recommendations for Congress to help turn the tide of excessive government secrecy –including reforming the misused state secrets privilege, strengthening congressional oversight of national security programs and enacting legislation to limit and regulate the executive branch’s classification power.

“By undermining our constitutional system of checks and balances, secrecy harms our democracy and makes our government less effective. Not only that, increasingly allowing our government to operate in the shadows lets errors and abuses stand unchecked and makes us less safe,” said Michael German, ACLU national security policy counsel and former FBI agent. “Piecemeal reform has failed. Congress needs to carry out its duty to address this threat to our democracy by taking drastic measures.”

• And from the 7th Circuit Court of Appeals, the great toilet paper decision.

Toilet paper war. After reviewing 675,000 pages of documents and transcripts of a dozen depositions, a three-judge panel in the U.S. 7th Circuit Court of Appeals ruled that a diamond-shaped pattern embossed in toilet paper is not entitled to trademark protection.