Part of the debate over how to avert the “fiscal cliff” focuses on the possibility of reining in certain tax loopholes and deductions.
The number of tax deductions — or tax breaks — has nearly doubled since the last significant overhaul of the tax code nearly a quarter century ago, thanks to a host of tax benefits added in the years since for children, college tuition, retirement savings, job hiring and the families of victims of terrorist attacks, among others.
As the number of tax breaks has increased, so has the value of some of the most popular deductions, including those for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.
How many tax breaks are there? Depends on whom you ask. The congressional Joint Committee on Taxation counts more than 300; the Treasury Department counts more than 170. Only about 8 percent of tax benefits go to corporations, on average, with most enjoyed by middle-class households.
So which tax breaks are the most popular? Here’s a quick look at the 10 most-popular tax breaks for individuals from 2011, based on number of people who take them and the cost:
1. Exclusion of employer contributions for medical insurance premiums and medical care: Worth $173.7 billion in 2011.
2. Mortgage interest deduction: $88.8 billion.
3. 401(k) plans: $62.9 billion.
4. Earned income tax credit: $62.5 billion.
5. Step-up basis of capital gains at death: $50.9 billion.
6. Exclusion of net imputed rental income: $47 billion.
7. “Making Work Pay” tax credit: $44 billion.
8. Child credit: $42.5 billion.
9. Employer plans: $42.2 billion.
10. Deduction of charitable contributions, other than education and health: $38.2 billion.
What are the most popular tax breaks and who benefits?
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BDN does anyone proof your headlines prior to publishing?
“What are the most popular tax breaks and who benefits?”
I easily found the “most popular tax breaks” part of the story but where is the “who benefits” part?
You’ll be interested to know that the original headline on the WaPo story was very similar – and even grammatically correct:
http://www.washingtonpost.com/blogs/2chambers/wp/2012/12/12/what-are-the-biggest-tax-deductions-and-exemptions-and-whom-do-they-benefit/
Not the people who need it.
Blanket opinion. As stated elsewhere, the mortgage breaks helps many, abused by a few.
Wow I’m allowed $100.00 of mortgage interest which gives me a tax return that pays one light bill and maybe the phone.
that’s $100 that renters don’t get. the mortgage deduction is a special interest, like the rest.
why should renters pay more income tax than home owners?
Because Congress decided they wanted more people to own homes than rent; they created a deduction against taxes for mortgage interest.
Delete the deduction, and home sales will decrease.
“Whatever government taxes, it gets less of”.
yes, I do understand the history behind it. but i don’t buy the idea that the interest deduction drives home sales since the deduction is taken after the sale.
if incentivizing home sales is the goal, there are more effective ways to do that than to reward existing home owners.
oh please, like the earned income credit doesn’t help those ‘who need it’
I don’t get any tax breaks except $100.00 of mortgage interest and donating to the presidential campagin which doesn’t change my tax return but the money has to come from someplace so taxes go up, so I don’t.
http://money.usnews.com/money/retirement/slideshows/top-10-individual-tax-breaks
Anyone else notice that charity was on the bottom of the list?
Charity is “capped”.
there are definitely more people on the take from others as oppossed to giving…
Huh?
Anyone else notice what number 1 is ? “1. Exclusion of employer contributions for medical insurance premiums and medical care: Worth $173.7 billion in 2011.” I didn’t even know it existed until rexcenlty . So all the complaining about the high cost of medical insurance to employers is a fallacy too . It is ALL dedcuctible (AKA- free)
And did anyone notice that none of these collectively add up to a hill of beans, IF the R’s are looking at “loop holes” to close the revenue gap? Just more fantasy math on their part .
Two words make the tax debate a moot point when it comes to our super patriotic rich “Americans”. Cayman Islands. The dirt bags waive the flag with one hand and click transfer with the other.
The problem with the Earned Income Tax Credit is that some get refunds back that exceed the amount that they paid in. That makes no sense, how can someone get refunded something that they did not pay in? I would like to know what the cost of that is.
If only all the Conservatives who idolize Reagan were as liberal as he was: President Reagan’s describe the Earned Income Tax Credit as “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”
easy they are poor .it’s called stimulous .ODD no one is looking at the BIGGEST deduction—.tax deduction for employers costs of health insurance
Now there you go again! If that benefit is no longer considered a “benefit” or “taxable deduction”, zero employers will make it available to employees… or is that EXACTLY what NOBAMA is working for?
Employers cost of health insurance is a business expense. The EIC is allowing people to get refunded something that they did not actually pay in in the first place.
The mortgage interest deduction is still very worthy of debating. I don’t know if completely doing away with it is the answer, though adjusting the rules to help only those that truly in need of such a break would result in significant savings.
I agree– we should be capping it– I posted this link in a different comment reply:
http://www.investopedia.com/articles/mortgages-real-estate/11/calculate-the-mortgage-interest-math.asp#axzz2EqT3tgpe
I ran my own numbers using last year’s taxes– the
deduction was worth MUCH less than I would have guessed. Cap or scrap the home interest deduction then raise the standard deduction and you help more people that can use it!
“Cap or scrap the home interest deduction then raise the standard deduction” I agree. The standard deduction should be $25,000 per for adults and $10,000 each for children. Then all the deductions can be capped out.
and revenue would be what??? HELLO
if you want to help people with home ownership, help them obtain homes.
get rid of the mortgage deduction, it rewards people who are already succeeding.
Well, artificially creating home ownership (part of the iconic American Dream), and getting people in homes they really can’t afford (tax breaks or not), is part of what created the housing bubble. I’d be more interested in helping current home owners that need it, vs trying to create incentive for new home owners. Though as pointed out, there are probably better, more efficient ways.
The noveau way (predatory mortgages) of getting people into housing was the problem .Up til the past decade the ‘incentives” worked just fine to create the American Dream .
It wasn’t a single problem and you know that. Of course that was a big part of it, though Americans lacking poor judgment and taking on mortgages they had no right taking on was a factor whether you want to admit it or not.
That Gordian Knot included lending institutions, at least one important pair of law-makers (Frank & Dodd), as well as greedy money manipulators. It took a Village to screw the housing market up!
it took a deregulated village….
Yes, greed drove the system to the brink, but the consumers were the victims, not the part of the problem.
Generally, this is what was going on in 2000: buyers were being qualified at lower initial payments since they were drastically discounting the starting rate from whatever index they were using. So, if my mortgage was a 30 ARM, and I was qualified to pay a $1000 a month payment, that payment would have (almost tripled) within a few short months as the ‘discount’ was eased out.
When that wasn’t enough, lenders just started forging documents.
Secondary markets were buying complicated products made up of bad loans. Those investors are ultimately to blame since they did not do their homework. Many of those investors were public entities and large retirement funds.
then we bail the bast#rds out and blame the poor people for wanting a slice of the American dream. go figure.
I’m not on the predators side by any means. Dealing out life sentences instead of bailouts should have been the prescription in many cases.
I don’t deny there were many true victims. Though to say that consumer greed (not cash, but materialistic), was not a factor is disingenuous.
It does not apply to every case, though there is a distinction to be made between a victim and a sucker.
and the home ownership would decline to 20-25% permaently stalling the economy. .
let the chips fall where they may. why should renters pay more income tax than home owners? that makes no sense.
Are you a realtor? ;)
He’s certainly not a small business owner!
I don’t agree. Please explain how taking a tax deduction after closing creates more home sales.
If incentivizing home sales is the goal, there are more effective ways to do it.
And why should renters, who can’t afford homes, foot the bill for those fortunate enough to own homes?
I disagree. Eliminating it would further cripple the slowly recvovering housing market. The mortgage deduction is often the deciding factor whether to buy or continue renting. That said, it should be capped to not further aid those who, as others have pointed out, have “made it”.
Sometimes renting a bit longer and saving more is more prudent. As in my other post, re-iterating that sometimes getting people into homes that they’re really not prepared to be in, can have very bad consequences.
Points granted. But there are long term incentives to develop equity instead of renting all your life. I also agree that the banks and loan companies were way out of control on selling houses to those not really prepared to buy. even worse are the speculators who fraudulently bought houses as their “first home” for gain, and then just walked away when the market imploded. That fraud ran about 25% in CA.
No doubt. I advise ownership to anyone who is financially prepared for the obligation. Equity is a beautiful thing. Bankruptcy, re-pos and foreclosures are not. Always better to be conservative on large scale transactions.
I didn’t think you could use that word on these pages…
and we became an economy that soley counted on “housing” to grow our economy– which is shy we crashed so hard.
Gee, was the more Bush’s fault, or Frank and Dodd?
Billionaires like Chellie Pingree and her husband probably don’t have a mortgage so the mortgage deduction is not of importance to her, but it is to me. Chellie and her husband, Mike Michaud and his ‘friend’, don’t go to church so the charitable deductions is not of major concern to them, but it is to me.
But, thanks to Hebrews 9:27, I really don’t care what they, the democrat and it’s lackeys, do.
Read this: http://www.investopedia.com/articles/mortgages-real-estate/11/calculate-the-mortgage-interest-math.asp#axzz2EqT3tgpe and then look at your own taxes and see just how “much” the deduction is “saving” you. I ran my own numbers using last year’s taxes– the deduction was worth MUCH less than I would have guessed. Capping that deduction seems the fairest way to go, although scrapping it might not be as painful to the average person as you would think.
This, “scrapping it might not be as painful to the average person as you would think”, That statement, on your part, shows the vast gulf between out two thinking.
Did you look at the article and actually do the math for your return? Was the deduction, honestly, worth as much as you thought it was? There seem to be many more equitable and fair ways to offer tax relief to those that need it than this way. As a homeowner I was viscerally against scrapping it… until I ran the numbers and it became clear that there are better ways to do this– caps and/or homeownership credits spring to mind. I think you might find the gulf between our two ways of thinking is less than you imagine.
if you have a mortgage, you technically don’t own your home, the bank does, so the later suggestion wouldn’t work
Why politicize this, especially for the charitable deductions? ALL Democrats don’t make charitable contributions? How do you know about anyone’s church attendance? Even if true, this may not eliminate anyone’s charitable deductions (they can be made to organizations or programs other the church’s). Shame, shame, Pastor, very un-Christian, especially your mis-application of Hebrews in this case at least..
Define Christian.
OK, I’ll bite, but you probably won’t agree with it. I believe in God and Christ (and the Trinity). I’m a life-long member of a mainline Protestant church which has become more inclusive than exclusive (per Christ’s teachings). Your sweeping political generalization and restrictive definition of what constitutes a charitable contribution (apparently,only by Christian church goers and only to the church) are not indicative of a true,Christian attitude.
Gopher, that is not a definition of Christian.
A Christian is one that follows the teachings of Christ, one who has given his or her to Christ, one that understands that in John 3:3 to be Born Again is not a request it is an ultimatum. You say inclusive, no where in the teachings of Christ is there to be found inclusiveness of any but those who are Born again. Now, do you know the meaning of Born Again?
By the way, your definition shows that it is you, not I that are Un-Christian.
Let me ask you a question, when you say inclusive, do you mean accepting of homosexual behavior and God forbid marriage?
I wish to give you a short Bible lesson. You say you believe, but you cannot define Christian. In James, the half brother of the Lord Jesus, chapter 2 verse19 we read “Thou believest that there is one God; thou doest well: the devils also believe, and tremble.” Do you understand that believe there is one God is not what get’s you into heaven?
and Gopher is a thousand times more reasoned than your para phrasing tea party self.
what galls me is that you claim to have the lock and key as to who and what is a Christian.
Here is what I believe: Only God knows who is worthy. that you try to dole out judgement insults His Grace and Majesty.
Why do “Christians” skip the part of the bible that teaches humility and want to jump to “paying God”?
I won’t answer your rhetorical questions, so save them.
Actions, not words, define a Christian.
The action that defines a Christian is the action Christ declared and clarified in John 3:1-21. For you see, salvation is not brought about by good works, good works is brought about after and in response to salvation.
Right. So “born again” Christians who have raped, murdered and thieved from their fellow men go to heaven…and non-“born again” men and women who have lived a kind, generous, and honest life go to hell or purgatory? Is that about it Bob?
I reject such tripe. If there is a god (I haven’t figured it out yet), I certainly don’t believe that he/she/it would be such a petty, prideful, self-conscious god in need of constant adulation and worship. If there is a judgement day, it will be based not on rituals, ceremonies and temporary, fleeting words, but on a lifetime of -deeds-.
How goes the secessionist movement?
Jesus said Be Born Again or go to hell. That is all thqt is important.
As for the secession movement, Paul Lepgae and Barak Obama will have a hard time competing to see which will be our poster boy.
By the way, there aint no purgatory. There is but eternity in the lake of fire for the majority and Paradise for the minority.
Whatever helps you sleep at night Bob.
Knowing where I will spend eternity makes my nights pleasant, do you know where you will spend eternity? All spend eternity in one of two places heaven or the lake of fire, by refusing to become Born Again you call Jesus a liar or you deny His deity.
Does the lake have kayaks? I love to kayak.
Is one who agrees only with you, because you gots the “right word”
Many non-billionaires have managed to pay off their mortgages (after decades of paying for them). However, they don’t necessarily want to scrap the deduction for others. as stated elsewhere, it should be capped though.
Pastor of the Baggers huh. How about we start taxing religious organizations such as yours that are just a scam.
You don’t even follow your own guidelines.Christian Internet Code of Ethics
As a Christian who is active on the internet,
“I hold myself to certain standards of conduct. They are:
I guard my online relationships
I am careful to visit websites that do not compromise my life in Christ
I take care that my written communications reflect Christ in my life
I guard my time to assure that my time online is kept in proper balance
with the rest of my life”
And then this
http://themaineteaparty.com/profile/RevRobertMCeleste
Now why would anyone take you seriously after seeing that????
Ahem I mean Amen. ROFL!
I did not know Hebrews mentioned democrat?
How Christian of you Bub …. your own brand I suspect that you use to brainwash your flock? Let’s find us some witches ….. and sentence them to some cruel and unusual punishment. Then burn the rest of the world for not agreeing with the Book of Bub.
what you’re doing is a form of fascism.
I see the total cost but not the number of people who took them. that’s important.
what is this : “9. Employer plans: $42.2 billion.”