The top 20% of households in terms of income get a bit more than half of the 10 most significant tax breaks in the code, according to a new Congressional Budget Office analysis, with an outsized 17% of all savings going to the richest 1%. The report is being both hailed and spun by Democrats and Republicans, the Washington Post reports; both want to eliminate some deductions, with Democrats urging that the wealthy pay more, while Republicans wanting to instead lower rates across the board.
The 10 biggest tax breaks include things like the low capital gains tax rate, deductions for mortgage interest and charitable contributions, and the tax-free treatment of employer-provided health insurance and retirement contributions, all of which are used primarily by the wealthy and upper-middle class. Only a few, like the tax-free treatment of Social Security benefits and the child tax credit, go to lower-income households. (Read more tax code stories.)