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1 Alan Cole, Corporate vs Individual Tax Expenditures 1 (2014)

handle is hein.taxfoundation/taxfaawb0001 and id is 1 raw text is: TAX(%~ FOUNDATION Corporate vs Individual Tax Expenditures By Alan Cole No. 218 Economist Key Findings * A tax expenditure is a departure from the normal tax code that lowers a taxpayer's burden-e.g., an exemption, a deduction, or a credit. * The list of tax expenditures in a tax system depends heavily on what one considers the normal tax code to be. * The federal tax system is a non-neutral tax system due to its bias in favor of immediate consumption over future consumption (i.e., saving); thus, many tax expenditures are an effort to make the tax base more neutral. * The total cost of tax expenditures in 2014 is $1.2 trillion with $148 billion in corporate expenditures and $1.036 trillion in individual expenditures. * The largest individual tax expenditures by cost are the exclusion of employer contributions for medical insurance premiums ($196 billion), the exclusion of net imputed rental income ($76 billion), and the deductibility of mortgage interest on owner-occupied housing ($70 billion). * The largest corporate tax expenditures by cost are deferral of foreign income ($76 billion), the deduction for domestic production activities ($10 billion), and accelerated depreciation of machinery and equipment ($8 billion). * The existence of many piecemeal efforts to make the tax code more neutral provides more evidence that fundamental tax reform is needed. ................................................................................................... : .........................................................................................................................................................................................................................................................................................................................................................................................................

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