Van Hollen Statement on CBO Report on Tax Expenditures
Washington, DC – Today Maryland Congressman Chris Van Hollen, Ranking Member of the House Budget Committee, issued the following statement about the Congressional Budget Office’s (CBO) report that he requested on the distribution of ten of the largest tax expenditures, which provided over $900 billion in tax benefits in 2013 alone:
“The CBO’s report shows that tax breaks are skewed in favor of the top 1 percent of Americans at the expense of other priorities. It’s clear that we can limit unproductive and excessive tax preferences for the very wealthy as part of a plan to reduce the long-term deficit and promote long-term economic growth. And we can do this without hurting the middle class, unlike Republican tax reform proposals.
“The report also demonstrates that we could quickly implement President Obama’s tax reform proposal, which would limit tax breaks for the very wealthy. The only thing stopping us from replacing the sequester and moving forward to adopting a balanced plan for long-term deficit reduction is the Speaker and Senate Republicans’ refusal to go to conference on the budget. In fact, we are now learning that the children of the men and women serving bravely at Fort Bragg will lose up to five days of school this fall as a result of the sequester – yet Congressional Republicans refuse to adopt a balanced plan that replaces these senseless cuts with a mix of targeted reductions and cuts to tax preferences for the wealthy.
“We all agree that Congress must reform the tax code – but it must be done in a way that strengthens the middle class.”
While the majority of tax expenditures, in total dollar terms, go to persons with incomes under $250,000, the wealthiest in our country benefit disproportionately.
- The top 1 percent of individuals (1.25 million people), by income, receive 17 percent of all tax expenditures in total dollar terms – or about as much as received by the bottom 40 percent of individuals by income (50 million persons) or all individuals in the fourth income quintile (25 million persons).
- In particular, the top 1 percent receive 68 percent of the tax benefit from the 20 percent top tax rate on capital gains and dividends (compared to the 39.6 percent top tax rate on ordinary income).