Who benefits from tax expenditures?

Major tax expenditures — such as lower rates on capital gains and dividends, deductions for charitable contributions, deductions for state and local taxes, and the mortgage interest deduction — tend to benefit high-income taxpayers more than lower income groups.

The Congressional Budget Office estimates that the top quintile of taxpayers receive 51% — around $445 billion — of the value of major tax expenditures, while only 8% — around $70 billion — goes to the bottom twenty percent.

Nonetheless, even though high income taxpayers tend to benefit disproportionately from tax expenditures, they still pay a larger share of their income in taxes than lower income groups on average, even after tax breaks have been taken into account.

For more information on the American tax system, see:

• Budget Basics: Who Pays Taxes? 
• What Kinds of Taxes Do Americans Pay?
• The U.S. Tax Burden Is Low Compared to Most Advanced Economies
• Finding Solutions: Tax Reform

Related: Infographic: How The U.S. Tax System Works