“Biden Administration Student Debt Changes” are the average annual cost for a package of changes to student loans the Biden Administration announced in August 2022. These changes include cancelling $10,000 of loans ($20,000 for Pell Grant recipients) for individuals making less than $125,000 and couples making less than $250,000, extending the payment pause from the end of August to the end of 2022, reducing payments in income-driven repayment plans, and shortening the length of forgiveness from 20 to 10 years for loans with $12,000 or lower balances.
"Gas Tax Holiday" is the average annual cost of repealing the gas tax for April through December 2022.
"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 Extension" is the average annual cost of extending the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six and raise the age limit from 16 to 17.
"SALT Deduction Cap Repeal” is the average annual cost of repealing the cap on the state and local tax deduction (SALT). The SALT deduction allows those who itemize their taxes to exclude taxes paid to their state and local governments from their taxable income.
“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.
“Health Insurance Subsidy Extension” is the average annual cost of extending expanded Affordable Care Act subsidies that both reduce premiums people are responsible for and qualify people at higher incomes.
"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, National Park Service, 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 Administration” 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 has 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.
“Tax Expenditures” is the broad name given to the more than 200 credits, deductions, exclusions, and other tax breaks.
“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.
“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%.
“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 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 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.
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 from their federal taxable income. 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 taxable income. In order to qualify for a cafeteria plan, an 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 care, and dependent care costs like child care or daycare.
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 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 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 “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.
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 for Municipal Bonds” allows the interest income 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 contributed with pre-tax income or withdrawals from the account are tax-free.
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 the full amount of certain asset purchases immediately, 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, in order to encourage research spending.
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