The Economics of Tax Changes: Provisions by Provisions

Taxes matter. When policymakers talk about tax reform they usually think of lowering rates and broadening bases. In this exercise they target the elimination of what are called tax expenditures in exchange for lower rates. But it's important to recongnize that while lower rates are very important to economic growth, the tax base matters as well.

This is because, in many cases, tax expenditures help define a neutral tax base by mitigating the exisiting tax code's baises against saving and investment and it's intances of double taxation. 

This page is home to economic analysis of individual tax provisions and their effect on jobs, wages, revenue, and the economy.  

In that sense, this page provides policymakers a menu of which tax provisions are important for economic growth and which ones can be used in exchange for lower rates without damaging the economy.

All analysis is produced using our Taxes and Growth Model.

Top 11 Individual Tax Expenditures by Cost:

  1. Mortgage Interest Deduction
  2. Property Tax Deduction for Owner Occupied Housing
  3. Reduced Tax Rates on Capital Gains and Qualified Dividends
  4. Deduction of State and Local Income Taxes or General Sales Taxes
  5. Accelerated Depreciation
  6. Exclusion for Employer Provided Health Insurance
  7. Earned Income Tax Credit
  8. Education Credits
  9. Child Tax Credit
  10. Exclusion of Social Security Retirement Benefits from Taxable Income
  11. Deduction for Charitable Contributions