The magic phrase in Governmentt-speak is “Tax Expenditures”\u00a0<\/p>\n
The US budget has a line called “Revenue from Personal Income Taxes” (more or less).\u00a0\u00a0 Congress has passed many things that are Tax Credits” that reduce the amount of taxes\u00a0due – some are refundable, some only apply if you actually pay taxes.<\/p>\n
If I would have had taxes of\u00a0 $1000, but receive a $500 tax credit, my only effect on the budget is you see\u00a0 +$500 to income tax revenue.\u00a0\u00a0 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.\u00a0\u00a0\u00a0 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.<\/p>\n
This is a way for Congress to effectively “spend money” on “programs” without there being a trace of it in the actual government budget.\u00a0\u00a0\u00a0 The only place it\u00a0shows 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.<\/p>\n
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.\u00a0\u00a0\u00a0 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.\u00a0\u00a0\u00a0 [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?]<\/p>\n
The Budget of the US Treasury does show the line item of $102 billion for the outlays for those Tax Expenditure programs\u00a0\u00a0 (the refunded tax credits)<\/p>\n
Here is the Treasury Department’s more detailed budget<\/p>\n
http:\/\/www.treasury.gov\/about\/budget-performance\/Pages\/index.aspx<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The magic phrase in Governmentt-speak is “Tax Expenditures”\u00a0 The US budget has a line called “Revenue from Personal Income Taxes” (more or less).\u00a0\u00a0 Congress has passed many things that are Tax Credits” that reduce the amount of taxes\u00a0due – some … Continue reading