SOURCE: Data from the Congressional Budget Office, Updated Budget Projections: Fiscal Years 2013 to 2023, May 2013; Tax Policy Center, How Large Are Tax Expenditures? A 2012 Update, April 2012; and Congressional Budget Office, Historical Budget Data, May 2013. Compiled by PGPF.
NOTE: Figures are for 2012. Medicare spending is net of premiums and payments from the states. Those receipts were $85 billion in 2012. Income tax revenue includes both individual and corporate income tax receipts. Tax expenditures include the effects on outlays, payroll, and excise taxes.
Tax expenditures — exemptions, deductions, credits, and other special provisions — allow households and corporations to reduce their tax liabilities. They also are expensive and cost about $1.2 trillion each year, more than the budget of any agency or spending program, including Social Security, Medicare, and the Department of Defense. In all, there are more than 150 tax expenditures written into the individual and corporate tax codes.
Many tax breaks are equivalent to government spending, intended to encourage and subsidize various behaviors. However, tax expenditures differ from direct spending programs in an important way. Direct appropriations for government programs are evaluated annually as part of the regular budget process, requiring the legislature to approve continued funding. Tax expenditures are not subject to the same annual review, making them far less transparent to the public than direct government spending.
Peter G. Peterson Foundation Chart Pack:
The PGPF chart pack illustrates that budget-making involves many competing priorities, limited resources, and complex issues. In this set of charts, we aim to frame the financial condition and fiscal outlook of the U.S. government within a broad economic, political, and demographic context.
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