IRS
Other Investment and Tax Incentives
Date:
December 17, 2010
Who:
IRS
Policy Area:
Fiscal Policy
Economic Target:
Consumers
Economic Target:
Manufacturers
Economic Target:
Other Business
Action Type:
Tax Break
Maximum Amount:
$156.81 billion
Deficit Impact:
$77.18 billion The 2010 tax cut package included a provision that would temporarily allow businesses to immediately write off the costs of equipment for the next two years. In addition, the package included a number of tax extenders that provide various targeted benefits.
Source:
Notes:
Maximum amount represents peak cost of these provision in the ten-year window. Deficit impact represents net costs of these provision from 2011-2020. Because the cost of the business expensing will be partially recouped after it expires, there is a significant difference between these two numbers.
Estate Tax Change
Date:
December 17, 2010
Who:
IRS
Policy Area:
Fiscal Policy
Economic Target:
Consumers
Economic Target:
Other
Action Type:
Tax Break
Maximum Amount:
$68.15 billion
Deficit Impact:
$68.15 billion The tax cut package included a lower estate and gift taxes for the next two years, providing a higher exemption threshold and a lower rate for estate and gift transfers beyond that threshold. The exemption was raised to $5 million and the rate set at 35 percent, compared to a $1 million exemption and 55 percent rate as previously scheduled under current law for 2011 and lower than the Administration's initial proposal of a $3.5 million exemption and a 45 percent tax rate beyond that.
Source:
Notes:
Maximum amount and deficit impact represent peak and net cost of this provision--which are the same--from 2011-2020.
Payroll Tax Holiday
Date:
December 17, 2010
Who:
IRS
Who:
Various Agencies
Policy Area:
Fiscal Policy
Economic Target:
Consumers
Action Type:
Tax Break
Maximum Amount:
$111.65 billion
Deficit Impact:
$111.65 billion The tax cut package included a one-year payroll tax cut of two percentage points on the employee side of the FICA tax, reducing the tax for employees from 6.2 percent to 4.2 percent.
Source:
Notes:
Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.
2-Year AMT Patch
Date:
December 17, 2010
Who:
IRS
Policy Area:
Fiscal Policy
Economic Target:
Consumers
Action Type:
Tax Break
Maximum Amount:
$136.68 billion
Deficit Impact:
$136.68 billion The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act included a two-year "patch" of the Alternative Minimum Tax (AMT).
Source:
Notes:
Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.
2-Year Extension of 2001/2003 Tax Cuts
Date:
December 17, 2010
Who:
IRS
Economic Target:
Consumers
Economic Target:
Other Business
Action Type:
Tax Break
Maximum Amount:
$407.64 billion
Deficit Impact:
$407.64 billion The 2010 tax cut included a two-year extension of all the provisions from the 2001/2003 tax cuts.
Source:
Notes:
Maximum amount and deficit impact represent gross and net cost, respectively, of this portion of the bill from 2011-2020.
Tax Credit Bonds
Date:
March 18, 2010
Who:
IRS
Policy Area:
Other
Economic Target:
Other
Action Type:
Tax Break
Maximum Amount:
$2.29 billion
Amount Spent:
$2.29 billion
Deficit Impact:
-$0.16 billion The Hiring Incentives to Restore Employment Act included tax credits on qualifying bonds.
Also included in the Hire Act were provisions creating incentives for hiring unemployed workers.
Notes:
Maximum amount reflects the lost revenue from the tax provisions over a 10-year period. Deficit impact reflects the total net cost of the provision in proportion to the total net cost of -$1.1 billion for the bill. Offsets totaled $16.7 billion, stemming largely from foreign account tax compliance and a delay in implementing worldwide interest expense allocation until 2020.
Amount spent unknown.
Incentives for Hiring Unemployed Workers
Date:
March 18, 2010
Who:
IRS
Economic Target:
Other
Action Type:
Tax Break
Maximum Amount:
$12.96 billion
Amount Spent:
$12.96 billion
Deficit Impact:
-$0.66 billion The Hiring Incentives to Restore Employment Act included several tax provisions aimed at providing tax breaks for companies and organizations that hire previously unemployed workers. The bill excludes employers from paying the 6.2 percent in federal payroll taxes for the rest of 2010 on new employees they hire who have been previously unemployed for over two months. The bill also allows employers to receive a $1,000 tax credit for each of these new hired employees if they are still with the same employer after a year.
Notes:
Maximum amount and amount spent reflect the lost revenue from the tax provisions over a 10-year period. Deficit impact reflects the total net cost of the provision in proportion to the total net cost of -$1.1 billion for the bill. Offsets totaled $16.7 billion, stemming largely from foreign account tax compliance and a delay in implementing worldwide interest expense allocation until 2020.
IRS Exempts Citigroup from Tax on Repurchase of TARP Assets
Date:
December 11, 2009
Who:
IRS
Who:
Treasury
Policy Area:
Financial Sector Policy
Economic Target:
Citigroup
Action Type:
Tax Break
Maximum Amount:
$38.00 billion The IRS agreed to give up billions in tax money in exchange for Citigroup’s repurchase of $20 billion of its assets held by TARP.
Notes:
According to a Washington Post article, the exact value of the IRS ruling will depend on Citi’s future profits and other factors. But accounting experts estimated that Citi will save at least several billion dollars. Some experts have also said that the lost tax revenue could easily outweigh the profits the Treasury will likely make in selling its ownership stake in Citi.
Increase in Low-Income Housing Tax Credit
Date:
July 23, 2008
Who:
IRS
Policy Area:
Sector Policy (Non-Financial)
Economic Target:
Housing
Action Type:
Tax Break
Maximum Amount:
$11.77 billion
Amount Spent:
$7.63 billion
Deficit Impact:
$7.63 billion This measure increased in 2008 and 2009 the per capita amount of the low-income housing tax credit allocable by each state. In addition, the new rule ignored the distinction between new buildings and existing buildings, allowed buidling receiving moderate rehabilitation assistance to dually qualify for the low-income housing credit, and extended the credit to some eligible students.
Notes:
Maximum amount reflects the peak cumulative cost of the provision over the 2008-2018 period. Amount spent and deficit impact reflect CBO's estimated ten-year budget impact of the provision (http://www.cbo.gov/ftpdocs/95xx/doc9597/hr3221.pdf).
Tax Credit for First-Time Homebuyers
Date:
July 23, 2008
Who:
IRS
Policy Area:
Sector Policy (Non-Financial)
Economic Target:
Housing
Action Type:
Tax Break
Maximum Amount:
$4.65 billion
Amount Spent:
$4.65 billion
Deficit Impact:
$4.65 billion This measure provides a $7,500 tax credit for some qualifying first-time homebuyers. The credit will be claimed on tax returns to reduce the home-purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Notes:
Maximum amount reflects the peak cumulative cost of the provision over the 2008-2018 period. Amount spent and deficit impact reflect CBO's estimated ten-year budget impact of the provision (http://www.cbo.gov/ftpdocs/95xx/doc9597/hr3221.pdf).
