Tax expenditures make up a substantial part of the federal budget. Some of them are larger than the entire budgets of the programs or departments that spend money for the same or related purposes. For ...

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The federal government collected revenues of $4.9 trillion in 2022—equal to 19.6 percent of gross domestic product (GDP) (figure 2). Over the past 50 years, federal revenue has averaged 17.4 percent ...

The standard deduction reduces a taxpayer’s taxable income. It ensures that only households with income above certain thresholds will owe any income tax. Taxpayers can claim a standard deduction when ...

Workers, owners of capital, and households that consume a disproportionate amount of taxed items all bear the burden of federal excise taxes. Excise taxes create a wedge between the price the final ...

At current tax rates, the direct revenue loss from cutting tax rates almost always exceeds the indirect gain from increased activity or reduced tax avoidance. Cutting tax rates can, however, partly ...

The credit provides an incentive for investment in low-income communities. The US Department of the Treasury competitively allocates tax credit authority to intermediaries that select investment ...

Unemployment insurance assists workers who become involuntarily unemployed and meet specified eligibility requirements. Unemployment insurance programs are run as federal-state partnerships financed ...

The exclusion lowers the after-tax cost of health insurance for most Americans. Employer-paid premiums for health insurance are exempt from federal income and payroll taxes. Additionally, the portion ...

The Highway Trust Fund finances most federal government spending for highways and mass transit. Revenues for the trust fund come from transportation-related excise taxes, primarily federal taxes on ...

Motor fuel taxes are taxes levied on gasoline, diesel, and gasohol (a mixture of ethanol and unleaded gasoline). State and local governments collected a combined $53 billion in revenue from motor fuel ...

Corporations and individual taxpayers who itemize can deduct charitable contributions to 501(c)(3) organizations. Many nonprofit institutions are exempt from paying federal income tax, but taxpayers ...