Thursday, May 5, 2011
Overall, tax expenditures give more benefits to high-income households relative to income but are roughly proportional to tax liabilities. The top quintile collects 55% of all income, pays 67% of all taxes, and gets nearly 65% of the value of tax expenditures. Middle-income households earn slightly more than 40% of all income, pay one-third of taxes, and get one-third of tax benefits. The poorest quintile of households receives slightly less than 4% of both income and benefits from tax expenditures but pays only 0.5% of federal taxes, largely because refundable credits offset almost all their tax liabilities.