Discuss Question 22
22. FISCAL KNOWLEDGE: Tax expenditures in the Internal Revenue Code (e.g. deductions, exemptions, credits and exclusions) result in over $1 trillion in lost federal revenue each year.
ANSWER: True – According to analysis by the Joint Committee on Taxation, it’s estimated that the federal government forgoes over $1 trillion dollars in revenue each year due to various forms of tax expenditures (deductions, credits, exemptions, and exclusions). Some of the most costly of these include the exclusion from taxation of employer-provided health insurance, and the deduction of mortgage interest on owner-occupied residences.