10/08/2012 05:35 pm ET

Does Mitt Romney Have The Guts To Kill These Tax Breaks? President Obama Didn't

As part of his much-discussed tax plan, Mitt Romney has said he plans to eliminate or place caps on certain deductions and loopholes. The idea sounds great on the campaign trail -- but it's not clear exactly where the Republican presidential nominee plans to take aim.

Romney has been clear about at least one planned cut: a change in household deductions. Last week, Romney floated an idea to cap households' deductions at $17,000 each year. But killing -- or even capping -- a revered tax break or loophole might be easier said than done.

Some tax preferences are so baked into the tax code that they have become sacred for individuals and corporations alike. Would a consumer really buy a house without considering the possible savings available through a mortgage deduction? Could companies provide the same shareholder returns if they couldn't use offshore tax havens to lower their bills?

Still, it's not cheap for Uncle Sam to offer tax discounts. Tax breaks, preferences and loopholes -- called tax expenditures by the government -- reduced the government's income by as much as $1.2 trillion last year, The New York Times reported.

And so far, President Barack Obama has not had much luck killing some of the tax breaks he's characterized as problematic. Obama railed against big oil and gas tax subsidies last spring, only to have his efforts shut down by the GOP.

Even if Romney is hoping to emulate another president famous for cutting taxes, Ronald Reagan, he could face major headwinds from lobby groups.

"When Romney says he is going to pay for the rate reduction by closing loopholes, that will be an incredibly difficult process because each one has a constituency that will fight to keep it," said Rebecca Wilkins, senior counsel for federal tax policy at Citizens for Tax Justice, a nonpartisan tax think tank in Washington, D.C.

Here are eight tax breaks and loopholes that are costing the government billions each year:

Eight Tax Loopholes That Cost Billions