Tax Impacts: Health Insurance, Housing, Prisons, and Expirations
By Renu Zaretsky :: May 2nd, 2014
Tax subsidies for health and housing top $600 billion in 2014. The latest Tax Facts from TPC’s Georgia Ivsin and Donald Marron reports that tax expenditures will top $1.4 trillion in fiscal year 2014. About $640 billion, or more than 40 percent, subsidize health (mostly employer-sponsored insurance) and owner-occupied housing (including the mortgage interest deduction). Wonder why it’s so hard for Congress to cut tax rates by closing “loopholes?”
Taxpayers fund prisons, and incarceration is on the rise. A new report from the National Research Council examines the rise of US incarceration over 40 years and determines that its social and economic costs outweigh its benefits. A 2012 research effort by the Vera Institute of Justice concluded that “the taxpayer cost of prisons, including costs outside states’ corrections budgets… was $39 billion in fiscal year 2010, $5.4 billion more than what their corrections budgets reflected.”
When is “extending” an expired tax break really just a new “tax cut?” Well, if four months have passed and a new law is required to (re)enact the break? It’s most certainly a new tax cut, says TPC’s Howard Gleckman. And it should be paid for, most certainly. Now, when does “should” turn into “will?”
Next week on the Hill: The Highway Trust Fund. The Senate Finance committee will review how to replenish the soon-to-run-dry fund on Tuesday, May 6. The panel will hear about short-term saves and long-term solvency options, as well as public-private partnerships and tax-preferred bonds to boost infrastructure investment.
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