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The Distribution of Major Tax Expenditures in the Individual Income Tax System

Date Published: 
Wednesday, May 29, 2013
Source/Author: 
Congressional Budget Office (May 2013)

This report examines how 10 of the largest tax expenditures in the individual income tax system in 2013 are distributed among households with different amounts of income.

A number of exclusions, deductions, preferential rates, and credits in the federal tax system cause revenues to be much lower than they would be otherwise for any given structure of tax rates. Some of those provisions—in both the individual and corporate income tax systems—are termed “tax expenditures” because they resemble federal spending by providing financial assistance to specific activities, entities, or groups of people. Tax expenditures, like traditional forms of federal spending, contribute to the federal budget deficit; influence how people work, save, and invest; and affect the distribution of income.

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