How Large Are Tax Expenditures?

Tax expenditures are getting increased scrutiny from budget hawks and tax reformers. New Treasury estimates, released as part of President Obamas recent budget, indicate that these tax preferences will reduce individual and corporate income tax revenues by almost $1.1 trillion in 2011. Those provisions will also increase spending on refundable tax credits by $108 billion and will reduce payroll and excise tax receipts by $111 billion. Together, the tax expenditures identified by Treasury will total almost $1.3 trillion this year.