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As Congress and the Administration begin to fill in the legislative details of their tax framework, the Tax Policy Center (TPC) has built on earlier work by calculating the cost of retaining certain tax expenditures in the code.
Key Takeaways: Reform that eliminates virtually all tax expenditures allows for rates to be lowered significantly; it can also preserve the amount of revenue projected under current law and maintain the distribution of tax burden across income groups. Retaining individual tax expenditures would require modestly higher rates than in the base scenario; combining provisions would have larger consequences than the sum of the individual effects.
The following table sets forth: current tax rates; rates under the Base Scenario (elimination of nearly all tax expenditures); and the effect on rates of adding back certain tax expenditures: