ABSTRACT
Tax expenditures are reductions in tax liabilities that result from preferential provisions in the federal tax code, such as special exclusions and exemptions from taxation, deductions, credits, deferrals, or preferential tax rates. Tax expenditures include revenue losses for the income tax, the estate and gift taxes, as well as payroll and excise taxes.[1] Table 1 provides a list of the 20 largest tax expenditures in federal income taxes. As special provisions, tax expenditures are treated as deviations from the normal tax structure.
