The magic phrase in Governmentt-speak is “Tax Expenditures”
The US budget has a line called “Revenue from Personal Income Taxes” (more or less). Congress has passed many things that are Tax Credits” that reduce the amount of taxes due – some are refundable, some only apply if you actually pay taxes.
If I would have had taxes of $1000, but receive a $500 tax credit, my only effect on the budget is you see +$500 to income tax revenue. You don’t see “Tax Revenue as if there had been no credit $1000, less the “x” Tax Credit Program -$500 = net $500 in taxes. The only part that shows up in the actual budget is if I get a refundable tax credit check because I owed less in taxes than the amount of my refundable tax credits.
This is a way for Congress to effectively “spend money” on “programs” without there being a trace of it in the actual government budget. The only place it shows up is in the calculation of the anticipated income tax revenue in future years – which is a murky number to begin with, because it is based on assumptions like GDP growth rates, interest rates and unemployment rates.
But even that is vague – to figure out the total “Tax Expenditures”, you have to start from the premise that all “inccome” should be taxable, and therefore anything that is not taxed is a tax expenditure. The CBO explanation says that because your employer pays half of the Social Security Tax and you aren’t taxed on the employer’s tax, that means you got a tax break. [Do you realize you pay social security on the income tax you pay to the government – and pay income tax on the amount you pay in social security taxes?]
The Budget of the US Treasury does show the line item of $102 billion for the outlays for those Tax Expenditure programs (the refunded tax credits)
Here is the Treasury Department’s more detailed budget
http://www.treasury.gov/about/budget-performance/Pages/index.aspx
Okay here is the “missing stuff” – but this is ONLY the portion the Treasury Department had to pay out in cash – not the total cost of the “credit” (2010)
Earned Income Tax Credit: $56 billion
Child Care Credit: $22 billion
Health Coverage Tax Credit: $205 Million
Alternative Minimum Tax Credit: $1 billion
First Time Homebuyer Credit: $8 billion
American Opportunity Credit: $9 billion
COBRA Tax Credit: $4 billion
Note that if a credit is not refundable, it doesn’t show up in this list at all – it just is reflected in the fact that the IRS collected less taxes than it would have without the credit.
[Do you realize you pay social security on the income tax you pay to the government – and pay income tax on the amount you pay in social security taxes?]
Yes, I learned that when I looked carefully at my first pay stub when I was 16. That was 38 years ago and they still haven’t stopped cheating by taxing productive citizens on money they never received. The earned income tax credit is just another way they use tax money to buy votes without the average citizen understanding what’s really happening.
As one of Clinton’s press spokesmen quipped during his first term: “Stroke of the pen, law of the land. Pretty cool!” So is the ability to write unlimited checks on the full faith and credit of the U.S. taxpayer.