"Infrastructure Investment and Jobs Act" is the gross average annual cost of H.R. 3684, which passed Congress in August 2021.
"FY 2022 Budget Resolution" is the gross average annual cost of the budget resolution passed by Congress in August 2021.
"Paid Family Leave" is the average annual cost of providing paid family leave in the FY 2022 budget resolution.
"Universal Pre-K " is the average annual cost of providing universal pre-K education in the FY 2022 budget resolution.
"Child Tax Credit Extension" is the average annual cost of extending the Child Tax Credit expansion from the March 2021 American Rescue Plan.
"SALT Deduction Cap Repeal" is the average annual cost of repealing the cap on the state and local tax deduction in the FY 2022 budget resolution.
"Free Community College" is the average annual cost of providing free community college in the FY 2022 budget resolution.
"ACA Subsidy Extension" is the average annual cost of extending Affordable Care Act subsidies to higher income people in the FY 2022 budget resolution.
"Child Care Subsidies" is the average annual cost of providing child care subsidies in the FY 2022 budget resolution.
“Defense and Military Benefits” is budget function 050, which 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, and budget function 700, which covers benefits and services for veterans.
“Foreign Aid and International Programs” is budget function 150, which includes providing military assistance to allies; aiding developing nations; and providing economic assistance to fledgling democracies through agencies such as the Department of State; the United States Agency for International Development; the Peace Corps; and the Millennium Challenge Corporation.
“Energy” is federal budget function 270. It includes civilian energy and environmental programs in the Department of Energy, the Rural Utilities Service of the Department of Agriculture, the Tennessee Valley Authority, and the Nuclear Regulatory Commission.
“Farm Subsidies” covers spending in the form of payments and other kinds of support extended by the U.S. federal government to certain farmers and agricultural businesses.
“Education” is what the federal government spends on elementary, secondary, vocational, and higher education, much of it through the Department of Education.
“Transportation” is federal budget function 400. It consists of programs that support and oversee various modes of transportation, including highways, mass transit, rail, air, and maritime transportation.
“Administration of Justice” is federal budget function 750. It 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.
“Tax Expenditures” is the broad name given to the more than 200 credits, deductions, exclusions, and other tax breaks. They represent a break from a “clean” tax code and are often intended to benefit groups of taxpayers and incentivize specific activities.
The “Exclusion for Employer-Paid Health Insurance Programs” makes health insurance premiums paid by employers and the portion paid by employees exempt from federal income and payroll taxes.
“Reduced Tax Rates on Capital Gains and Dividends” reduces the taxes 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%.
“Preferential Tax Treatment of 401(k)s” reduces taxes on employees’ 401(k) accounts. The income is taxed once—either when placed in the account, as with Roth accounts, or when it is withdrawn, as in traditional 401(k)s.
The “Child Tax Credit” can be claimed for each child under the age of 17 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 $1,400. This credit is gradually reduced as the income of a household increases over $200,000 for singles 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 payouts, 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.
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.
“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 “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 50 percent of their adjusted gross income and donated goods must be deducted at their "fair market value.”
The “State and Local Tax Deduction” allows taxpayers to deduct state and local tax payments on their federal tax returns. The 2017 tax law imposed a cap of $10,000 on such deductions.
The “Exclusion of Cafeteria Plan Benefits” allows workers to use pre-tax pay towards fringe benefits, thus reducing their tax liability. In order to qualify for a cafeteria plan, the employer must offer employees a choice between different compensation packages—which commonly include plans that pay for the employee’s share of health care premiums, supplemental coverage like dental and vision, and dependent care costs like child care or day care.
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 Capital Gains at Death” allows capital gains on assets held at their owner’s death to be tax-free. For example, assume that a stock is originally purchased at $10/share, its owner dies when the stock is valued at $50/share, and the heir sells it for $60/share. The heir will only owe taxes on the gain from $50 to $60. The gain from $10 to $50 will be untaxed.
The “Exclusion of Gains for Home Sales” allows the first $250,000 of profit from the sale of a taxpayer’s main home to be tax-free ($500,000 for couples).
The “Mortgage Interest Deduction” allows homeowners to deduct the interest paid on the mortgage of their first home. This deduction is capped at $750,000 of debt.
The “Pass-Through Deduction” enables taxpayers to deduct 20% of their self-employed or business income, excluding some occupations at higher-income limits.
The “Exclusion for Municipal Bonds” allows the interest earned from municipal bonds to be tax-free.
“Tax Benefits for IRAs” reduce taxes on individual retirement accounts (IRAs). Depending on the type of account, either initial contributions are tax-free or the income is tax-free when it is ultimately withdrawn.
The “Exclusion of Life Insurance Benefits” exempts life insurance payouts from being subject to federal income taxes.
“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.
“Expensing for Small Businesses” allows firms with average annual gross revenues of less than $25 million to deduct certain capital expenses in the year the asset is purchased, rather than taking the deduction over the life of the asset.
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 “Research and Experimentation Credit” is available to eligible businesses who conduct R&D. The credit is equal to a percentage of a business’ qualified research expenses above a base amount, encouraging research spending.
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