Total Revenue Loss Estimates for Tax Expenditures in the Income Tax, by Provision statistics



Function and provision	1999	2000	2001	2002

National defense:
Current law tax expenditures	2,120	2,140	2,160	2,180
Exclusion of benefits and allowances to armed forces personnel	2,120	2,140	2,160	2,180

International affairs:
Current law tax expenditures	14,415	15,595	16,685	17,015
Exclusion of income earned abroad by US citizens	2,330	2,550	2,790	3,040
Exclusion of certain allowances for federal employees abroad	635	665	695	725
Exclusion of income of foreign sales corporations	3,640	3,890	4,160	4,460
Inventory property sales source rules exception	1,050	1,100	1,150	1,250
Deferral of income from controlled foreign corporations ¹	5,800	6,200	6,600	7,000
Deferred taxes for financial firms on certain income earned overseas	960	1,190	1,290	540

Proposals affecting tax expenditures:
Simplify the foreign tax credit limitation
for dividends from 10/50 companies	0	80	168	102

General science, space, and technology:
Current law tax expenditures:	3,595	2,875	5,245	5,675

Credit for increasing research activities	1,705	1,010	3,360	3,710

Energy:
Current law tax expenditures	1,880	1,930	1,940	1,955
Expensing of exploration and development costs, fuels	-80	-15	-30	-10
Excess of percentage over cost depletion, fuels	265	275	280	280
Alternative fuel production credit	1,025	960	905	845
Exception from passive loss limitation for working interests
in oil and gas properties	30	25	25	25
Capital gains treatment of royalties on coal	65	65	70	70
Exclusion of interest on energy facility bonds	115	115	115	120
Enhanced oil recovery credit	225	260	295	340
New technology credit	50	60	80	90
Alcohol fuel credit	15	15	15	15
Tax credit and deduction for clean-fuel burning
vehicles and properties	85	90	105	100
Exclusion from income of conservation subsidies provided
by public utilities	85	80	80	80

Proposals affecting tax expenditures	0	0	198	371
Provide tax credit for energy-efficient building equipment	0	0	18	35
Provide tax credit for new energy-efficient homes	0	0	82	150
Extend electric vehicle tax credits, provide tax credit
for hybrid vehicles	0	0	0	4
Provide 15-year depreciable life for distributed power property	0	0	1	1
Extend and modify the tax credit for producing
electricity from certain sources	0	0	91	173
Provide tax credit for solar energy systems	0	0	9	19
Electricity restructuring	0	0	-3	-11

Natural resources and environment:
Current law tax expenditures	1,480	1,500	1,585	1,645
Expensing of exploration and development costs, nonfuel minerals	15	15	20	20
Excess of percentage over cost depletion, nonfuel minerals	225	230	245	250
Exclusion of interest on bonds for water, sewage, and
hazardous waste facilities	460	460	470	475
Capital gains treatment of certain timber income	65	65	70	70
Expensing of multiperiod timber growing costs	495	500	530	565
Investment credit and seven-year amortization for
reforestation expenditures	10	10	10	15
Tax incentives for preservation of historic structures	210	220	240	250

Proposals affecting tax expenditures:
Provide Better America Bonds to improve the environment	0	0	8	41

Agriculture:
Current law tax expenditures	885	915	960	995
Expensing of certain capital outlays	70	70	75	75
Expensing of certain multiperiod production costs	85	85	90	95
Treatment of loans for solvent farmers	10	10	10	10
Capital gains treatment of certain income	635	665	695	725
Income averaging for farmers	75	75	80	80
Deferral of gain on sale of farm refiners	10	10	10	10

Commerce and housing:
Current law tax expenditures	227,870	235,565	247,145	255,305
Financial institutions and insurance:
Exemption of credit union income	1,470	1,550	1,650	1,765
Excess bad debt reserves of financial institutions	60	65	55	45
Exclusion of interest on life insurance savings	13,920	14,985	16,130	17,365
Special alternative tax on small property and casualty
insurance companies	5	5	5	5
Tax exemption of insurance companies owned by
tax-exempt organizations	220	225	235	240
Small life insurance company deduction	100	100	100	100
Housing:
Exclusion of interest on owner-occupied mortgage subsidy bonds	905	915	920	930
Exclusion of interest on rental housing bonds	155	155	160	160
Deductibility of mortgage interest on owner-occupied homes	56,920	58,815	60,925	63,240
Deductibility of State and local property tax
on owner-occupied homes	21,215	22,185	23,075	24,000
Deferral of income from post-1987 installment sales	995	1,015	1,035	1,055
Capital gains exclusion on home sales	18,000	18,540	19,095	19,670
Exception from passive loss rules for $25,000 of rental loss	5,315	5,035	4,790	4,555
Credit for low-income housing investment	2,820	3,055	3,195	3,300
Accelerated depreciation on rental housing ¹	3,710	3,985	4,225	4,500

Commerce:
Cancellation of indebtedness	40	25	15	15
Exceptions from imputed interest rules	160	160	160	165
Capital gains (except agriculture, timber, iron ore, and coal) ¹	39,405	40,575	41,780	43,025
Capital gains exclusion of small corporation stock	5	5	5	5
Step-up basis of capital gains at death	25,800	27,090	28,240	29,370
Carryover basis of capital gains on gifts	175	185	195	205
Ordinary income treatment of loss from small
business corporation stock sale	35	35	40	40
Accelerated depreciation of buildings other than rental housing ¹	1,660	710	-435	-755
Accelerated depreciation of machinery and equipment ¹	26,445	27,740	32,830	33,345
Expensing of certain small investments (normal tax method)	1,465	1,590	1,925	1,965
Amortization of start-up costs (normal tax method)	200	205	205	215
Graduated corporation income tax rate ¹	6,360	6,300	6,275	6,460
Exclusion of interest on small-issue bonds	310	315	315	320

Proposals affecting tax expenditures	0	0	330	533
Increase and index low-income housing tax credit per-capita cap	0	0	6	55
Bridge the Digital Divide	0	0	107	272
Simplify, retarget and expand expensing for small business	0	0	217	206

Transportation:
Current law tax expenditures	1,870	1,970	2,080	2,200
Deferral of tax on shipping companies	15	15	15	15
Exclusion of reimbursed employee parking expenses	1,725	1,805	1,895	1,995
Exclusion for employer-provided transit passes	130	150	170	190

Community and regional development:
Current law tax expenditures	1,260	1,415	1,505	1,370
Investment credit for rehabilitation of
structures (other than historic)	25	25	30	30
Exclusion of interest for airport, dock, and similar bonds	730	735	740	750
Exemption of certain mutuals and cooperatives income	60	60	60	65
Empowerment zones and enterprise communities	330	445	500	465
Expensing of environmental remediation costs	115	150	175	60

Proposals affecting tax expenditures	0	0	66	487
Provide New Markets Tax Credit	0	0	30	222
Extend Empowerment Zone (EZ) tax incentives and authorize
additional EZs	0	0	36	167
Make permanent the expensing of brownfields remediation costs	0	0

539. Total Revenue Loss Estimates for Tax Expenditures in the Income Tax, by Provision