Where have all the tax breaks gone?
Long time passing.
Where have all the tax breaks gone?
Long time ago.

With apologies to Peter, Paul & Mary we’ve taken some liberties with the lyrics so we can make the dry topic of taxation a little less, well, boring.  As a counterbalance we’ll toss in a few statistics to ramp up the boring factor.  Is this a great Monday or what?!

On average tax expenditures give more benefits to high-income households.  However these benefits are relative to income and roughly proportional to tax liabilities:

  • The top 20% of households earns 55% of all income.  They pay 67% of all taxes while receiving nearly 65% of the value of tax expenditures.
  • Middle-income households collect slightly more than 40% of all income.  They pay about 33% of all taxes while receiving about 33% of tax benefits.
  • The poorest 20% of households earns less than 4% of aggregate income and receives a nearly like amount of benefits from tax expenditures.  Their share of federal taxes paid is a scant 0.5%.

Want to read more?  Check out this report from the Tax Policy Center.