The cost of policies Congress may consider.
2024 government spending on key areas of the budget.
The cost of tax breaks (i.e. spending through the tax code).
“Biden Administration Student Debt Changes” is the average annual cost of a regulatory action that created a new Income-Driven Repayment (IDR) plan for student loan borrowers. The new plan increased the amount of income exempt from payment calculations, reduced the required percentage of income paid on undergraduate loans, eliminated interest accrual when payments don't cover the entire amount, and reduced the number of years in payment from 20 to 10 for borrowers who took out less than $22,000, among other changes.
"Elimination of Taxes on Tips" is the average annual cost of eliminating taxes on tips with guardrails to prevent extreme abuse, as proposed by former President Trump.
“Expansion of Health Insurance Premium Tax Credits” is the average annual cost of permanently extending the enhanced premium tax credits for Affordable Care Act marketplace plans.
"Repeal of Taxation on Social Security Benefits" is the average annual cost of eliminating taxation on Social Security benefits, as proposed by former President Donald Trump.
"TCJA Extension (Under 400K)" is the average annual cost of extending the expiring individual tax provisions of the Tax Cuts and Jobs Act (TCJA) - except those explicitly reversed in President Biden's Fiscal Year 2025 budget - for households making less than $400,000 per year, as proposed by Vice President Kamala Harris.
"TCJA Individual Tax Cuts Extension" is the average annual cost of extending the individual and estate tax provisions of the Tax Cuts and Jobs Act (TCJA) at the end of 2025.
"Paid Family Leave" is the average annual cost of a federal program to provide four weeks of paid time off to family members who have to care for a newborn or seriously ill family member.
"Universal Pre-K" is the average annual cost of a federal program to provide universal pre-K education to every child in the United States.
"Child Tax Credit Expansion" is the average annual cost of making the Child Tax Credit fully refundable, expanding eligibility to 17-year-olds, and increasing the size of the benefit to $6,000 for newborns, $3,600 for children under six, and $3,000 for children six years and older, as proposed in Vice President Kamala Harris's New Way Forward for the Middle Class.
"Earned Income Tax Credit Expansion" is the average annual cost of expanding the Earned Income Tax Credit for workers without dependent children.
"SALT Deduction Cap Increase” is the average annual cost of increasing the cap on the state and local tax deduction (SALT) to $80,000. The SALT deduction allows those who itemize their taxes to exclude taxes paid to their state and local governments from their taxable income.
"WEP/GPO Repeal" is the average annual cost of repealing Social Security's Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which are provisions designed to reduce certain excessive Social Security payments.
"Extend Expensing of Equipment and Research" is the average annual cost of allowing businesses to write off research and experimentation (R&E) expenses immediately instead of over several years and continuing 100 percent bonus depreciation, which allows business equipment purchases to be deducted immediately, instead of phasing it out.
"Delay Tighter Limit on Business Interest Deductibility" is the average annual cost of adopting the pre-2022 practice of limiting the interest deduction to 30 percent of business earnings before interest, taxes, depreciation, and amortization (EBITDA) as opposed to just before income and taxes (EBIT), as proposed in the Wyden-Smith tax package.
“Free Community College” is the average annual cost of a federal program to provide free community college for two years to every citizen in the United States.
"Suspend Medicare Sequester" is the average annual cost of suspending a scheduled 2 percent cut to Medicare payments.
"Child Care Subsidies” is the average annual cost of the federal government providing money to individual states to create programs that help offset the costs of child care.
“Defense and Military Benefits” includes the military activities of the Department of Defense, the nuclear weapons-related activities of the Department of Energy, and the national security activities of several other agencies, along with benefits and services for veterans.
“Foreign Aid and International Programs” includes providing military assistance to allies, aiding developing nations, and providing economic assistance to fledgling democracies.
“Science, Space, and Technology” includes NASA, the National Science Foundation, and energy research programs.
“Energy” includes spending on energy and environmental programs in the Department of Energy, Department of Agriculture, and the Nuclear Regulatory Commission.
“Natural Resources and Environment” includes environmental protection and natural resource stewardship programs. The Environmental Protection Agency, Forest Service, Army Corps of Engineers, and National Oceanic and Atmospheric Administration are some of the agencies in this function.
“Farm Subsidies” includes financial assistance provided by the federal government to farmers and agricultural businesses.
“Education” is what the federal government spends on elementary, secondary, vocational, and higher education largely through the Department of Education.
“Health Care” includes programs that provide or promote health insurance coverage, respond to the COVID-19 pandemic and other public health issues, and fund health research and product approval. Programs or agencies in this area include Medicare, Medicaid, the Affordable Care Act’s insurance subsidies, the National Institutes of Health, and the Centers for Disease Control and Prevention.
“Income Security” includes spending on cash benefits and other types of assistance for low- and middle-income households as well as federal employee retirement programs. This area includes the Child and Earned Income tax credits, the Supplemental Nutrition Assistance Program (also known as food stamps), unemployment benefits, Supplemental Security Income, and housing assistance programs.
“Social Security” is the program that provides benefits to retirees, disabled workers, and survivors.
“Transportation” consists of programs that support and oversee various modes of transportation and transportation infrastructure. This includes the Federal Highway Administration, Federal Transit Administration, Maritime Administration, and the Federal Aviation Administration.
“Administration of Justice” involves programs that provide federal law enforcement, litigation and judicial services, federal correctional operations, and state and local criminal justice assistance. The Federal Bureau of Investigation, the Drug Enforcement Administration, and the Federal Bureau of Prisons are some of the agencies within this function.
“Federal Emergency Management Agency” is the agency responsible for responding to disasters. FEMA provides administrative support and funds to assist areas recovering from disasters. During the COVID-19 pandemic, FEMA’s work included providing equipment and personnel to hospitals, setting up vaccination and testing sites, and providing funeral assistance.
“General Government” consists of basic legislative and administrative activities for the White House and Congress and other areas of government that don’t fit into other categories. This area includes funding for Congressional salaries, staff, and agencies; Presidential staff and agencies; the Treasury Department, including the IRS; and the National Archives and Records Administration. During the COVID-19 pandemic, this area has also included state and local government relief funds.
“Reduced Tax Rates on Capital Gains and Dividends” are the lower tax rates paid by investors on profits made from assets, like stocks, land, buildings, or art, that they have held for longer than a year. The tax rates on capital gains are 0%, 15%, and 20% – as opposed to taxes on most other income, which range from 10% to 37%.
“Exclusion for Employer-Paid Health Insurance Programs” exempts health insurance premiums paid by employers and the portion paid by employees from federal income and payroll taxes.
“Preferential Tax Treatment of 401(k)s” allows employees to contribute wages to retirement accounts that reduce their taxable income, making them pay taxes on that income only when it is withdrawn from the account.
The “Child Tax Credit” generally can be claimed for each child under the age of 18 and has a value of up to $2,000. If the credit is larger than taxes owed, the taxpayer can receive a refund of up to $1,500. This credit is gradually reduced as the income of a household increases over $200,000 for individuals or $400,000 for couples.
“Preferential Tax Treatment of Defined Benefit Pensions” applies to qualified employer-sponsored retirement plans. Similar to 401(k)s, contributions to defined benefit plans are not taxed as income until the employee receives payments, which can be decades later.
“Reduced Tax Rates on Foreign-Earned Multinational Business Income” decrease the rate at which income earned by US-based companies in foreign countries is taxed. Companies will typically pay taxes to the country where the income is earned and not the United States unless the other country imposes very low tax rates.
“Accelerated Write-Offs for Business Equipment” allow businesses to deduct the price of capital assets (i.e., equipment, machinery, or business property) more quickly than those assets wear out.
The “Earned Income Tax Credit” is paid out to working families with low to moderate incomes. A family with more children receives a larger credit. The Earned Income Tax Credit is listed as both a spending program and a tax break. The portion that is given as refunds is classified as spending, while the tax break number is larger because it includes both the refund portion and the portion that reduces the amount of tax individuals owe.
The “Pass-Through Deduction” enables taxpayers to deduct 20% of their self-employed or business income from their taxable income, with the exception of some occupations at higher-income limits.
The “Exclusion of Capital Gains at Death” allows assets to be passed on from owners to their heirs in a way that prevents the gains to never be taxed. For example, an asset purchased at $10,000 decades ago that is now worth $50,000 would be passed on to an heir at $50,000 without ever having the $40,000 gain taxed.
The “Exclusion of Social Security Benefits” exempts the Social Security benefits of individuals with income below $25,000 or couples below $32,000 from being taxed. Above these thresholds, benefits are partially taxed.
The “Exclusion of Gains for Home Sales” allows the first $250,000 of profit from the sale of a taxpayer’s primary residence to be tax-free ($500,000 for couples).
The “Charitable Deduction” allows contributions to charitable organizations to be deducted from an individual’s tax liability, regardless of whether donations are as cash or goods. Such deductions can total up to 60 percent of their adjusted gross income, and donated goods must be deducted at their "fair market value.”
The “Exclusion for Municipal Bonds” allows the interest income earned from municipal bonds to be tax-free.
The “Mortgage Interest Deduction” allows homeowners to deduct the interest paid on the mortgage of their primary residence from their taxable income. This deduction is capped at the first $750,000 of mortgage value.
“Tax Benefits for IRAs” reduce taxes on individual retirement accounts (IRAs). Depending on the type of account, either initial contributions are contributed with pre-tax income or withdrawals from the account are tax-free.
The “State and Local Tax Deduction” allows taxpayers to deduct state and local tax payments from their federal taxable income. The 2017 tax law imposed a cap of $10,000 on such deductions.
“Health Cost Deductions” allow taxpayers to deduct large medical expenses, the self-employed to deduct their health insurance premiums, and certain taxpayers to maintain tax-preferred health savings accounts.
The “Higher Education Tax Credit” is a combination of two credits of up to $2,000 each given for undergraduate, graduate, or professional students.
The “Exclusion of Life Insurance Benefits” exempts life insurance payouts from being subject to federal income taxes.
The “Research and Experimentation Credit” is available to eligible businesses who conduct R&D, in order to encourage research spending.
“Tax Expenditures” is the broad name given to the more than 200 credits, deductions, exclusions, and other tax breaks.