View TPC's Tax Topics page on tax expenditures.

Tax expenditures are revenue losses attributable to tax provisions that often result from the use of the tax code to promote social goals without incurring direct expenditures. Tax expenditures are implemented within the tax code primarily through the deduction of expenses, exclusion of certain income from the tax base, refundable and non-refundable credits that directly reduce tax liability, and reduced tax rates on income from specific sources. In many cases, tax expenditures are the equivalent of spending programs carried out through the tax code.

The Tax Reform Act of 1986 substantially reduced federal tax expenditures but Congress has added more tax expenditures over the intervening 25 years. Between 1990 and 2010, non-business tax expenditures grew from 4.6 percent of GDP to 6.5 percent.

The Tax Policy Center has estimated the distribution of individual income tax expenditures and examined options to restructure and reform individual tax expenditures or limit the aggregate benefits from tax expenditures to high-income taxpayers.

Distributional Analysis

• Distribution of Individual Income Tax Expenditures (February 2013)
• Distribution of all individual income tax expenditures and seven categories of tax expenditures (Summer 2011)
• Federal tax benefits from ten major individual income tax expenditures in 2011 (Summer 2011)
• Options for taxing high-income households, including limiting individual income tax expenditures in 2013 (Summer 2011 - Winter 2012)
• Options to repeal or restructure the mortgage interest deduction in 2015 and 2011 (Winter and Summer 2011)
• Tax expenditures for housing, health and retirement savings (Spring 2009)