In a November 5 report (JCX-23-20), the Joint Committee on Taxation provided an overview of federal tax expenditures for fiscal 2020 to 2024, including discussion of the concept of tax expenditures, how they are measured, and updated estimates. Among the largest tax expenditures, defined contribution plans are projected to cost $1.01 trillion; defined benefit plans will cost $663 billion; the reduced tax rate on the active income of controlled foreign corporations is estimated to cost $295.1 billion; reduced tax rates on capital gains and dividends are expected to cost $736.2 billion; the child tax credit is estimated to cost $582.5 billion; the employer healthcare exclusion is projected to cost $943.5 billion; and the earned income tax credit is expected to cost $356.4 billion. Some provisions are projected to have negative tax expenditures, among them the limitation on the net interest deduction ($57.1 billion), the limitation on active passthrough losses ($103.4 billion), and the surtax on net investment income ($146.6 billion).

JCT Provides Overview of Tax Expenditures

In a November 5 report (JCX-23-20), the Joint Committee on Taxation provided an overview of federal tax expenditures for fiscal 2020 to 2024, including discussion of the concept of tax expenditures, how they are measured, and updated estimates. Among the largest tax expenditures, defined contribution plans are projected to cost $1.01 trillion; defined benefit plans will cost $663 billion; the reduced tax rate on the active income of controlled foreign corporations is estimated to cost $295.1 billion; reduced tax rates on capital gains and dividends are expected to cost $736.2 billion; the child tax credit is estimated to cost $582.5 billion; the employer healthcare exclusion is projected to cost $943.5 billion; and the earned income tax credit is expected to cost $356.4 billion. Some provisions are projected to have negative tax expenditures, among them the limitation on the net interest deduction ($57.1 billion), the limitation on active passthrough losses ($103.4 billion), and the surtax on net investment income ($146.6 billion).