New Report: Growing Cost of Tax Breaks Signals Need for Reform
National Priorities Project Exposes the Big Money in Tax Breaks, which cost the U.S. Treasury $1.18 Trillion in 2013
May 7, 2014
FOR IMMEDIATE RELEASE
Contact: Becky Sweger, firstname.lastname@example.org, 571-480-6244
Northampton, MA -- In the midst of Congressional debate about a tax extenders package, National Priorities Project (NPP) has released a new report, "The Big Money in Tax Breaks," which puts the cost of tax breaks into perspective. The one-of-a-kind analysis shows that annual tax breaks have grown by $900 billion over 40 years, costing the U.S. Treasury $1.18 trillion in 2013 alone. Tax extenders are just one piece of the billions siphoned off from tax revenue each year -- money that could otherwise be used to fund popular initiatives ranging from clean drinking water to infrastructure repairs to education programs.
In FY 2013, the $1.18 trillion cost of all tax breaks amounted to the same as the entire discretionary budget, and 1.6 times the federal budget deficit. The size of tax breaks has grown significantly from $277 billion in 1974 to $741 billion at the time of the 1986 tax reform, to $1.18 trillion today (numbers adjusted for inflation).
"The so-called tax extenders, a laundry list of unrelated, "temporary" tax breaks that have been bundled together and extended year after year, costing the U.S. Treasury billions of dollars, is a great example of why we need comprehensive tax reform," said Becky Sweger, Director of Data and Technology at NPP. The more than 50 extenders up for consideration will cost the U.S. Treasury $85 billion in revenue each year.
"Tax breaks written into the tax code are no different from any other kind of spending," she continued. "And although they cost the federal government more than $1 trillion in 2013, tax breaks receive little or no oversight by lawmakers once they're enacted."
NPP's analysis and accompanying interactive visualization track how tax breaks have ballooned over the past 40 years -- as a result of corporate tax loopholes as well as individual deductions such as the home mortgage interest deduction and the special rate on capital gains income. The report also examines how corporations and the wealthiest Americans benefit disproportionately from existing tax breaks in the tax code.
"Between 2007 and 2013, the revenue lost just from U.S. corporations deferring taxes on income earned abroad rose more than 360%, going from $14 billion to $65 billion," said Sweger.
Some key findings of NPP's new report include:
View the interactive visualization at http://nationalpriorities.org/interactive-data/taxbreaks/2014/visualization.
Read NPP's report highlighting key analysis from the data at http://nationalpriorities.org/analysis/2014/big-money-tax-breaks/exposing-big-money-tax-breaks.
The entire dataset can be downloaded at http://nationalpriorities.org/analysis/2014/big-money-tax-breaks/complete-data-on-tax-breaks.