The largest transfers in the federal budget
Every entry here is lawful, enacted by Congress, and paid for out of general revenue. This tool ranks them by what they cost taxpayers each year, and by how narrowly the benefit concentrates once it lands. It takes no position on which party enacted what.
Four economists who agree on little else
Breaks marketsAdam Smith
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”Adam SmithClassical liberal, the founding argument for free marketsAn Inquiry into the Nature and Causes of the Wealth of Nations, 1776“People of the same trade seldom meet together … but the conversation ends in a conspiracy against the public.”
Breaks governmentGeorge Stigler
“As a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.”George StiglerChicago school, Nobel laureate 1982The Theory of Economic Regulation, 1971“As a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.”
Breaks bothMancur Olson
Stable societies accumulate organised interest groups over time, and those groups grow better at capturing a share of national output than at increasing it. The result is a slow ossification: the longer the period of stability, the denser the accumulated web of special arrangements, and the harder any of it becomes to undo.Mancur OlsonPublic choice, the standard account of collective actionThe Rise and Decline of Nations, 1982Summary of the argument, not a direct quotation.Organised groups grow better at capturing a share of national output than at increasing it.
Breaks bothJoseph Stiglitz
A substantial part of the wealth at the top is not a return on anything created, but a transfer from the rest of the economy obtained through political means. The damage is twofold: resources go to securing transfers rather than to production, and the visible capture of policy by those who can afford it corrodes public confidence that government works for anyone else.Joseph StiglitzKeynesian, Nobel laureate 2001The Price of Inequality, 2012Summary of the argument, not a direct quotation.Much of the wealth at the top is not a return on anything created, but a transfer obtained through political means.
Transfers tracked
33
Federal only, FY2025 except where noted
Combined annual cost
$2.0T
Most recent published estimates
Flowing to concentrated capture
$1.2T
Cost weighted by concentration score
Annual taxpayer cost, largest first.
33 shown · $2.0T/yr combined
| # | Transfer | Annual cost | % of federal spending | Benefit distribution | Who pays | Sector lobbying | Source |
|---|---|---|---|---|---|---|---|
| 1 | Preferential rates on long-term capital gains and qualified dividendsIncome from selling assets is taxed at a lower rate than income from working.Tax expenditureCapital & investment | $254BFY2025 | 3.6% | highly concentratedOwners of large appreciated asset portfolios | Wage and salary earners, and taxpayers generally. | $94Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Reduced rates of tax on dividends and long-term capital gains". |
| 2 | Exclusion of employer contributions for health insuranceEmployer-paid health premiums are untaxed, unlike wages paid in cash.Tax expenditureHealth | $226BFY2025 | 3.2% | moderately spreadHouseholds in higher marginal rate brackets | Taxpayers generally, including the uninsured and self-employed. | $158Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of employer contributions for health care, health insurance premiums, and long-term care insurance premiums". Income tax only, the payroll tax effect is not included, which is why combined estimates elsewhere run substantially higher. |
| 3 | Deferral for defined contribution retirement plansIncome routed into 401(k)-style accounts is untaxed until withdrawal, often decades later.Tax expenditureRetirement | $197BFY2025 | 2.8% | unevenEmployees able to contribute at or near the statutory cap | Taxpayers generally, including workers with no employer plan. | $87Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Defined contribution plans". Excludes defined benefit plans ($134.7B) and IRAs ($34.6B), which JCT scores separately. A deferral, not an exemption. |
| 4 | Subsidies for insurance bought through health benefit exchangesPremium tax credits that pay part of the cost of individual-market health coverage.CreditHealth | $135BFY2025 | 1.9% | broadly distributedHouseholds without access to employer coverage | General taxpayers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Subsidies for insurance purchased through health benefit exchanges". Falls to $81.5B by FY2029 as the temporarily enhanced subsidies lapse. |
| 5 | Deferral for defined benefit pension plansTraditional pension contributions and their investment earnings are untaxed until paid out.Tax expenditureRetirement | $135BFY2025 | 1.9% | unevenLong-tenured employees under surviving plans | Taxpayers generally, including workers with no pension. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Defined benefit plans". Scored separately from defined contribution plans ($197.3B) and IRAs ($34.6B). A deferral, not an exemption. |
| 6 | Child Tax CreditA per-child credit against income tax, partially refundable.CreditFamily support | $128BFY2025 | 1.8% | broadly distributedHouseholds with dependent children across most of the income range | General taxpayers, including households without children. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Credit for children and other dependents". Includes $47.9B of refundable outlay effects. |
| 7 | Qualified business income deduction (§199A)Owners of pass-through businesses deduct 20% of that income before tax.Tax expenditureBusiness structure | $75.5BFY2025 | 1.1% | concentratedOwners of large pass-through entities | Wage earners, and employees doing identical work as W-2 staff. | $112Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for qualified business income". |
| 8 | Deduction for charitable contributionsDonations reduce taxable income, at a value that rises with the donor's tax rate.Tax expenditurePhilanthropy | $70.7BFY2025 | 1.0% | highly concentratedItemising households in higher rate brackets | General taxpayers, including the majority who do not itemise. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of three JCT lines: contributions other than education and health ($52.5B), to education ($10.6B), and to health organizations ($7.6B). |
| 9 | Earned Income Tax CreditA refundable credit that phases in with earnings for lower-income working households.CreditFamily support | $66.9BFY2025 | 0.95% | broadly distributedLower-income households with earned income | General taxpayers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Earned income credit". Includes $56.2B of refundable outlay effects. |
| 10 | Step-up in basis at deathUnrealised gains on inherited assets are wiped out rather than taxed.Tax expenditureCapital & investment | $66.3BFY2025 | 0.95% | highly concentratedHeirs receiving assets with large accrued unrealised gain | All taxpayers. Revenue is forgone permanently, not deferred. | $41Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of capital gains at death". |
| 11 | Preferential treatment of foreign-source corporate incomeForeign earnings of US multinationals face lower effective rates than domestic earnings.Tax expenditureInternational | $62.2BFY2025 | 0.89% | highly concentratedMultinationals with mobile intangible property | Domestic-only businesses, and taxpayers generally. | $203Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of two JCT corporate lines: reduced tax rate on active income of controlled foreign corporations ($47.6B) and the deduction for foreign-derived intangible income ($14.6B). |
| 12 | Accelerated depreciation of equipmentBusinesses deduct the cost of equipment faster than it actually wears out.Tax expenditureBusiness structure | $58.5BFY2025 | 0.83% | concentratedCapital-intensive firms | Taxpayers generally, and labour-intensive businesses. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Depreciation of equipment in excess of the alternative depreciation system" — corporate ($34.2B) plus individual ($24.3B). A timing benefit: deductions taken earlier, not additional deductions. |
| 13 | Exclusion of capital gains on primary residence salesUp to $250,000 of gain on selling a home ($500,000 married) is untaxed.Tax expenditureHousing | $50BFY2025 | 0.71% | unevenLong-tenured owners in high-appreciation markets | Taxpayers generally, including renters. | $78Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of capital gains on sales of principal residences". |
| 14 | Deduction for state and local taxesState and local taxes paid reduce federal taxable income, up to a cap.Tax expenditureState & local | $49.1BFY2025 | 0.70% | concentratedItemising households in high-tax jurisdictions | Taxpayers generally, including non-itemisers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction of nonbusiness State and local government taxes". Rises to $65.5B by FY2029, reflecting the higher cap enacted in 2025. |
| 15 | Deduction for mortgage interestInterest paid on home loans reduces taxable income for itemisers.Tax expenditureHousing | $45.5BFY2025 | 0.65% | concentratedItemising households with large mortgages | Renters, non-itemising owners, and taxpayers generally. | $78Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for mortgage interest on owner-occupied residences". |
| 16 | Exclusion of untaxed Social Security and railroad retirement benefitsMost Social Security benefits are not subject to federal income tax.Tax expenditureRetirement | $44.9BFY2025 | 0.64% | broadly distributedRetirees below the taxation thresholds | Working-age taxpayers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of untaxed Social Security and railroad retirement benefits". Rises to $64.2B by FY2029. |
| 17 | Expensing of research and experimental costsResearch spending is deducted immediately rather than written off over years.Tax expenditureResearch & innovation | $42.7BFY2025 | 0.61% | concentratedResearch-intensive corporations | General taxpayers, and loss-making research firms. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Expensing of research and experimental expenditures", corporate ($41.4B) plus individual ($1.3B). Falls to $0.9B by FY2029: this is a timing benefit and the figure reflects the transition to restored immediate expensing rather than a permanent annual cost. JCT notes it is the net combined effect of domestic and foreign treatment, foreign research still being amortised over 15 years. |
| 18 | Credit for increasing research activitiesA credit against tax for research spending above a firm's historical base.CreditResearch & innovation | $33.1BFY2025 | 0.47% | concentratedLarge firms with sustained research programmes | General taxpayers, and firms too small to qualify. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Credit for increasing research activities", corporate ($32.1B) plus individual ($1.0B). Rises to $42.6B by FY2029, the largest sustained increase of any item in this dataset. |
| 19 | Exclusion of income in voluntary employees' beneficiary associationsEmployer-funded benefit trusts pay no tax on contributions, earnings or payouts.Tax expenditureEmployee benefits | $31BFY2025 | 0.44% | unevenEmployers large enough to run a benefit trust | Taxpayers generally, including workers at smaller employers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of income in voluntary employees' beneficiary associations". JCT notes the treatment allows deduction of employer contributions, deferral of earnings, and untaxed distributions where the plan provides accident or health benefits. |
| 20 | Exclusion of interest on public purpose state and local bondsInterest paid to holders of state and local government bonds is untaxed.Tax expenditureState & local | $27BFY2025 | 0.39% | concentratedHigh-marginal-rate bondholders | Federal taxpayers generally. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of interest on public purpose State and local government bonds" — corporate ($5.1B) plus individual ($21.9B). |
| 21 | Clean energy production and investment creditsCredits for generating low-emission electricity or investing in the plant that does.CreditEnergy | $26.7BFY2025 | 0.38% | unevenUtility-scale project developers | General taxpayers. Cost is set by uptake, not by appropriation. | $134Mwhole sector, 2024 | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of JCT energy-credit lines in force for FY2025: the legacy energy credit ($22.5B) and credits for electricity production from renewable resources ($4.2B). The technology-neutral §45Y and §48E credits that replace them are near zero in FY2025 and ramp from 2026, so this figure understates the programme’s later cost. |
| 22 | Exclusion of veterans' disability compensationDisability compensation paid to veterans is not subject to federal income tax.Tax expenditureVeterans & military | $19.2BFY2025 | 0.27% | broadly distributedVeterans with a service-connected disability rating | General taxpayers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of veterans' disability compensation". Rises to $22.5B by FY2029 as the compensated population grows. |
| 23 | Deferral for traditional individual retirement accountsContributions to a traditional IRA are deducted now and taxed on withdrawal.Tax expenditureRetirement | $19.1BFY2025 | 0.27% | unevenHouseholds able to contribute to the annual limit | Taxpayers generally, including those with no surplus to save. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Individual retirement arrangements: Traditional IRAs". Scored separately from employer plans and from Roth accounts. A deferral, not an exemption. |
| 24 | Exclusion of amounts received under life insurance contractsInvestment growth inside a life insurance policy is never taxed.Tax expenditureEmployee benefits | $18.9BFY2025 | 0.27% | concentratedHolders of cash-value policies used as savings | Savers holding the same assets outside a policy. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of amounts received under life insurance contracts", corporate ($1.8B) plus individual ($17.1B). |
| 25 | Enhanced deduction for seniorsAn extra deduction of up to $6,000 for taxpayers aged 65 and over.Tax expenditureFamily support | $16.8BFY2025 | 0.24% | moderately spreadSeniors with enough taxable income to use a deduction | General taxpayers, including working-age households. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Enhanced deduction for seniors". Rises to $23.0B by FY2028 then falls to $5.8B in FY2029, consistent with expiry after 2028. |
| 26 | Carryover basis of appreciated property transferred by giftGiving away an appreciated asset triggers no tax; the gain passes to the recipient.Tax expenditureCapital & investment | $16.5BFY2025 | 0.24% | highly concentratedDonors of substantially appreciated assets | Taxpayers generally. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Carryover basis of appreciated property transferred by gift". Declines to $11.2B by FY2029. |
| 27 | Deduction for overtime payUp to $12,500 of qualified overtime compensation is deductible ($25,000 joint).Tax expenditureFamily support | $16.4BFY2025 | 0.23% | unevenNon-exempt hourly workers with substantial overtime | General taxpayers, including salaried exempt workers. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for overtime pay". Peaks at $23.0B in FY2028 then falls to $5.8B in FY2029, consistent with expiry after 2028. |
| 28 | Deferral for plans covering partners and sole proprietorsSelf-employed retirement plans, with contribution limits far above an IRA.Tax expenditureRetirement | $16.2BFY2025 | 0.23% | concentratedHigh-earning partners and sole proprietors | Employees, who face lower contribution ceilings. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Plans covering partners and sole proprietors (sometimes referred to as "Keogh plans")". |
| 29 | Federal crop insurance and commodity support programsPremium subsidies and price supports paid to agricultural producers and insurers.Direct subsidyAgriculture | $15.6BFY2025 | 0.22% | concentratedLarge-acreage operations | General taxpayers, and consumers via higher commodity prices. | $68Mwhole sector, 2024 | CurrentSourceCBO, USDA Farm Programs Baseline, February 2026Published Jan 15, 2026 · 7 months agoPublished within the last year.Sum of two lines from CBO's baseline: Federal Crop Insurance Corporation outlays ($11.9B) plus Commodity Credit Corporation price-support-program outlays ($3.7B, covering Price Loss Coverage, Agriculture Risk Coverage, marketing loans and dairy support), both FY2025. This is a poor single-year summary: the same baseline shows CCC price-support outlays alone jumping to $21.4B in FY2027 as the higher statutory reference prices enacted in the One Big Beautiful Bill Act (P.L. 119-21) phase into payment calculations, taking the combined total to roughly $37B that year. Re-read this baseline's later editions before treating $15.6B as current. |
| 30 | Exemption for Roth individual retirement accountsRoth contributions are taxed now, and all later earnings are untaxed forever.Tax expenditureRetirement | $15.5BFY2025 | 0.22% | concentratedLong-horizon holders of appreciating assets | Taxpayers generally, permanently. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Individual retirement arrangements: Roth IRAs". Unlike the other retirement items this is a genuine exemption rather than a deferral, so the cost never reverses. |
| 31 | Opportunity Zone capital gains deferral and exclusionGains reinvested in designated zones are deferred, and later appreciation is untaxed.Tax expenditureCapital & investment | $5.7BFY2025 | 0.08% | concentratedHolders of existing realised gains | General taxpayers. Gains for zone residents remain unproven. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Qualified opportunity zones", corporate ($1.0B) plus individual ($4.7B). Annual figures swing sharply, and turn negative in 2027, as deferred gains are recognised. |
| 32 | Deduction for tipsUp to $25,000 of qualified tip income is deductible.Tax expenditureFamily support | $5.0BFY2025 | 0.07% | unevenHigher-earning workers in tipped occupations | General taxpayers, including workers in untipped jobs. | , | CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for tips". Rises to $7.6B by FY2028 then falls to $1.9B in FY2029, consistent with expiry after 2028. |
| 33 | Preferential tax treatment of carried interestInvestment fund managers' share of a fund's profits is taxed as capital gain, not as pay for services.Tax expenditureCapital & investment | $1.3BFY2027 | n/a | highly concentratedGeneral partners of private equity, hedge, real estate and venture funds | Wage earners taxed at ordinary rates, and taxpayers generally. | $94Mwhole sector, 2024 | RecentSourceCBO, Options for Reducing the Deficit: 2025 to 2034, "Tax Carried Interest as Ordinary Income" (built from Joint Committee on Taxation staff estimates)Published Dec 12, 2024 · 20 months agoOne to two years old. Likely still the most recent published estimate.Not a JCT tax expenditure line: JCT does not score carried interest separately, and it is absent from JCX-45-25, which is why this entry was removed from the dataset until a citable estimate could be found. This is CBO's published deficit-reduction estimate for taxing carried interest as ordinary labor income and applying self-employment tax to it, the mirror image of the provision's current cost. The published annual profile ramps from $0.5B in FY2025 to $1.6B in FY2034 as the change phases in; $1.3B is the figure CBO gives for FY2027, FY2028 and FY2029 alike, and it also equals the ten-year (2025-2034) average of $13.0B ÷ 10. |
- 1Preferential rates on long-term capital gains and qualified dividends$254B3.6% of federal spending
Income from selling assets is taxed at a lower rate than income from working.
highly concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Reduced rates of tax on dividends and long-term capital gains". - 2Exclusion of employer contributions for health insurance$226B3.2% of federal spending
Employer-paid health premiums are untaxed, unlike wages paid in cash.
moderately spread·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of employer contributions for health care, health insurance premiums, and long-term care insurance premiums". Income tax only, the payroll tax effect is not included, which is why combined estimates elsewhere run substantially higher. - 3Deferral for defined contribution retirement plans$197B2.8% of federal spending
Income routed into 401(k)-style accounts is untaxed until withdrawal, often decades later.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Defined contribution plans". Excludes defined benefit plans ($134.7B) and IRAs ($34.6B), which JCT scores separately. A deferral, not an exemption. - 4Subsidies for insurance bought through health benefit exchanges$135B1.9% of federal spending
Premium tax credits that pay part of the cost of individual-market health coverage.
broadly distributed·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Subsidies for insurance purchased through health benefit exchanges". Falls to $81.5B by FY2029 as the temporarily enhanced subsidies lapse. - 5Deferral for defined benefit pension plans$135B1.9% of federal spending
Traditional pension contributions and their investment earnings are untaxed until paid out.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Defined benefit plans". Scored separately from defined contribution plans ($197.3B) and IRAs ($34.6B). A deferral, not an exemption. - 6Child Tax Credit$128B1.8% of federal spending
A per-child credit against income tax, partially refundable.
broadly distributed·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Credit for children and other dependents". Includes $47.9B of refundable outlay effects. - 7Qualified business income deduction (§199A)$75.5B1.1% of federal spending
Owners of pass-through businesses deduct 20% of that income before tax.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for qualified business income". - 8Deduction for charitable contributions$70.7B1.0% of federal spending
Donations reduce taxable income, at a value that rises with the donor's tax rate.
highly concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of three JCT lines: contributions other than education and health ($52.5B), to education ($10.6B), and to health organizations ($7.6B). - 9Earned Income Tax Credit$66.9B0.95% of federal spending
A refundable credit that phases in with earnings for lower-income working households.
broadly distributed·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Earned income credit". Includes $56.2B of refundable outlay effects. - 10Step-up in basis at death$66.3B0.95% of federal spending
Unrealised gains on inherited assets are wiped out rather than taxed.
highly concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of capital gains at death". - 11Preferential treatment of foreign-source corporate income$62.2B0.89% of federal spending
Foreign earnings of US multinationals face lower effective rates than domestic earnings.
highly concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of two JCT corporate lines: reduced tax rate on active income of controlled foreign corporations ($47.6B) and the deduction for foreign-derived intangible income ($14.6B). - 12Accelerated depreciation of equipment$58.5B0.83% of federal spending
Businesses deduct the cost of equipment faster than it actually wears out.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Depreciation of equipment in excess of the alternative depreciation system" — corporate ($34.2B) plus individual ($24.3B). A timing benefit: deductions taken earlier, not additional deductions. - 13Exclusion of capital gains on primary residence sales$50B0.71% of federal spending
Up to $250,000 of gain on selling a home ($500,000 married) is untaxed.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of capital gains on sales of principal residences". - 14Deduction for state and local taxes$49.1B0.70% of federal spending
State and local taxes paid reduce federal taxable income, up to a cap.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction of nonbusiness State and local government taxes". Rises to $65.5B by FY2029, reflecting the higher cap enacted in 2025. - 15Deduction for mortgage interest$45.5B0.65% of federal spending
Interest paid on home loans reduces taxable income for itemisers.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for mortgage interest on owner-occupied residences". - 16Exclusion of untaxed Social Security and railroad retirement benefits$44.9B0.64% of federal spending
Most Social Security benefits are not subject to federal income tax.
broadly distributed·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of untaxed Social Security and railroad retirement benefits". Rises to $64.2B by FY2029. - 17Expensing of research and experimental costs$42.7B0.61% of federal spending
Research spending is deducted immediately rather than written off over years.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Expensing of research and experimental expenditures", corporate ($41.4B) plus individual ($1.3B). Falls to $0.9B by FY2029: this is a timing benefit and the figure reflects the transition to restored immediate expensing rather than a permanent annual cost. JCT notes it is the net combined effect of domestic and foreign treatment, foreign research still being amortised over 15 years. - 18Credit for increasing research activities$33.1B0.47% of federal spending
A credit against tax for research spending above a firm's historical base.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Credit for increasing research activities", corporate ($32.1B) plus individual ($1.0B). Rises to $42.6B by FY2029, the largest sustained increase of any item in this dataset. - 19Exclusion of income in voluntary employees' beneficiary associations$31B0.44% of federal spending
Employer-funded benefit trusts pay no tax on contributions, earnings or payouts.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of income in voluntary employees' beneficiary associations". JCT notes the treatment allows deduction of employer contributions, deferral of earnings, and untaxed distributions where the plan provides accident or health benefits. - 20Exclusion of interest on public purpose state and local bonds$27B0.39% of federal spending
Interest paid to holders of state and local government bonds is untaxed.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of interest on public purpose State and local government bonds" — corporate ($5.1B) plus individual ($21.9B). - 21Clean energy production and investment credits$26.7B0.38% of federal spending
Credits for generating low-emission electricity or investing in the plant that does.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.Sum of JCT energy-credit lines in force for FY2025: the legacy energy credit ($22.5B) and credits for electricity production from renewable resources ($4.2B). The technology-neutral §45Y and §48E credits that replace them are near zero in FY2025 and ramp from 2026, so this figure understates the programme’s later cost. - 22Exclusion of veterans' disability compensation$19.2B0.27% of federal spending
Disability compensation paid to veterans is not subject to federal income tax.
broadly distributed·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of veterans' disability compensation". Rises to $22.5B by FY2029 as the compensated population grows. - 23Deferral for traditional individual retirement accounts$19.1B0.27% of federal spending
Contributions to a traditional IRA are deducted now and taxed on withdrawal.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Individual retirement arrangements: Traditional IRAs". Scored separately from employer plans and from Roth accounts. A deferral, not an exemption. - 24Exclusion of amounts received under life insurance contracts$18.9B0.27% of federal spending
Investment growth inside a life insurance policy is never taxed.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Exclusion of amounts received under life insurance contracts", corporate ($1.8B) plus individual ($17.1B). - 25Enhanced deduction for seniors$16.8B0.24% of federal spending
An extra deduction of up to $6,000 for taxpayers aged 65 and over.
moderately spread·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Enhanced deduction for seniors". Rises to $23.0B by FY2028 then falls to $5.8B in FY2029, consistent with expiry after 2028. - 26Carryover basis of appreciated property transferred by gift$16.5B0.24% of federal spending
Giving away an appreciated asset triggers no tax; the gain passes to the recipient.
highly concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Carryover basis of appreciated property transferred by gift". Declines to $11.2B by FY2029. - 27Deduction for overtime pay$16.4B0.23% of federal spending
Up to $12,500 of qualified overtime compensation is deductible ($25,000 joint).
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for overtime pay". Peaks at $23.0B in FY2028 then falls to $5.8B in FY2029, consistent with expiry after 2028. - 28Deferral for plans covering partners and sole proprietors$16.2B0.23% of federal spending
Self-employed retirement plans, with contribution limits far above an IRA.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Net exclusion of pension contributions and earnings: Plans covering partners and sole proprietors (sometimes referred to as "Keogh plans")". - 29Federal crop insurance and commodity support programs$15.6B0.22% of federal spending
Premium subsidies and price supports paid to agricultural producers and insurers.
concentrated·CurrentSourceCBO, USDA Farm Programs Baseline, February 2026Published Jan 15, 2026 · 7 months agoPublished within the last year.Sum of two lines from CBO's baseline: Federal Crop Insurance Corporation outlays ($11.9B) plus Commodity Credit Corporation price-support-program outlays ($3.7B, covering Price Loss Coverage, Agriculture Risk Coverage, marketing loans and dairy support), both FY2025. This is a poor single-year summary: the same baseline shows CCC price-support outlays alone jumping to $21.4B in FY2027 as the higher statutory reference prices enacted in the One Big Beautiful Bill Act (P.L. 119-21) phase into payment calculations, taking the combined total to roughly $37B that year. Re-read this baseline's later editions before treating $15.6B as current. - 30Exemption for Roth individual retirement accounts$15.5B0.22% of federal spending
Roth contributions are taxed now, and all later earnings are untaxed forever.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Individual retirement arrangements: Roth IRAs". Unlike the other retirement items this is a genuine exemption rather than a deferral, so the cost never reverses. - 31Opportunity Zone capital gains deferral and exclusion$5.7B0.08% of federal spending
Gains reinvested in designated zones are deferred, and later appreciation is untaxed.
concentrated·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Qualified opportunity zones", corporate ($1.0B) plus individual ($4.7B). Annual figures swing sharply, and turn negative in 2027, as deferred gains are recognised. - 32Deduction for tips$5.0B0.07% of federal spending
Up to $25,000 of qualified tip income is deductible.
uneven·CurrentSourceJCT, Estimates of Federal Tax Expenditures for Fiscal Years 2025-2029 (JCX-45-25), Table 1Published Dec 3, 2025 · 8 months agoPublished within the last year.JCT line: "Deduction for tips". Rises to $7.6B by FY2028 then falls to $1.9B in FY2029, consistent with expiry after 2028. - 33Preferential tax treatment of carried interest$1.3Bn/a
Investment fund managers' share of a fund's profits is taxed as capital gain, not as pay for services.
highly concentrated·RecentSourceCBO, Options for Reducing the Deficit: 2025 to 2034, "Tax Carried Interest as Ordinary Income" (built from Joint Committee on Taxation staff estimates)Published Dec 12, 2024 · 20 months agoOne to two years old. Likely still the most recent published estimate.Not a JCT tax expenditure line: JCT does not score carried interest separately, and it is absent from JCX-45-25, which is why this entry was removed from the dataset until a citable estimate could be found. This is CBO's published deficit-reduction estimate for taxing carried interest as ordinary labor income and applying self-employment tax to it, the mirror image of the provision's current cost. The published annual profile ramps from $0.5B in FY2025 to $1.6B in FY2034 as the change phases in; $1.3B is the figure CBO gives for FY2027, FY2028 and FY2029 alike, and it also equals the ten-year (2025-2034) average of $13.0B ÷ 10.