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  3. US Family Asset Tax Breaks Put At USD550bn By 2018

US Family Asset Tax Breaks Put At USD550bn By 2018

by Mike Godfrey, Tax-News.com, Washington

26 August 2014


A paper from the Tax Policy Center (TPC) has pointed out how large an amount of tax subsidy resources the United States Government directs toward helping families build assets in the form of home ownership, retirement savings, higher education and small business development – a total of USD370bn in 2014 and a projected USD554bn in 2018.

Of the two largest subsidies, the largest asset-building tax expenditure is currently for homeownership at a cost of USD200bn, and is forecast to rise to more than USD260bn in 2018. The second largest at the moment, retirement savings and life insurance, is calculated to take only USD125 billion, but is expected to increase to USD255bn by 2018.

In the homeownership category, the two largest expenditures are noted by the TPC to be the exclusion for imputed rental income (USD76bn) and the mortgage interest deduction (USD68bn). The net exclusion for contributions and earnings in employer-based pensions (USD77bn) makes up about 60 percent of retirement subsidies.

The TPC's statistics are taken from figures produced by the Joint Committee on Taxation and US Treasury. A tax expenditure is counted if its chief rationale is to increase ownership of an asset and it is claimed directly by the household purchasing the asset.

TAGS: tax | small business | business | pensions | insurance | real-estate | retirement | United States | tax breaks | individual income tax | Tax

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