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1 Scott A. Hodge, Who Benefits Most from Targeted Corporate Tax Incentives 1 (2010)

handle is hein.taxfoundation/ffcdgxz0001 and id is 1 raw text is: FOUN: .D T1O N July 27, 2010 FC No. 236 Who Benefits Most from Targeted Corporate Tax Incentives? By Scott A. Hodge Taking advantage of the tragic Gulf oil spill, some legislators are attempting to turn the energy bill being debated in Congress into a vehicle to repeal the tax code's subsidies to the oil and gas industry. A White House proposal to eliminate tax expenditures that benefit oil and gas companies would, according to FY 2011 Budget, collect an additional $36 billion over ten years. However, this includes several provisions that benefit a broad cross-section of industries. Some interest groups have piled on, claiming even bigger tax collections are possible.' These charges invite the larger question: How valuable are tax provisions that benefit particular industries or groups of people? We can find these answers within President Obama's 2011 budget published last February, in a volume titled Analytical Perspectives.2 This volume contains estimates produced by the Treasury's Office of Tax Analysis of the budgetary costs of all of the tax preferences benefiting both corporate and individual taxpayers. In budgetary parlance, these preferences are called tax expenditures. When we add up all of the tax expenditures available to corporations in 2011, they total $102 billion.3 While this is a lot of money to be sure, these preferences taken together are still less than the budgetary cost of popular individual tax breaks such as the mortgage interest deduction ($104 billion), individual tax breaks benefiting state and local government ($96 billion), and the exclusion for employer-provided health insurance ($174 billion). But even if all of the biggest tax expenditures are on the individual side of the tax code, it is still worth examining those on the corporate side. The $102 billion in corporate tax expenditures break down into five major categories: 'Sima J. Gandhi, Eliminating Tax Subsidies for Oil Companies, Center for American Progress, May 13, 2010. 2 Budget of the United States, Fiscal Year 2011, Analytical Perspectives, p. 207. Tax expenditures are interactive, so the official estimates only apply to eliminating any one of them. Scott A. Hodge is president of the Tax Foundation.