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April 27, 2017
The Half-Trillion Dollar Tax Program That’s Driving Wealth Inequality
By Christopher Brown, director for financial security at PolicyLink; and Jeremie Greer, vice president of policy and research at CFED
This tax season, as partisan debate continues to dominate Capitol Hill, the U.S. federal government will quietly spend over half a trillion dollars on tax programs to help American households build wealth. Indeed, these annual investments will promote wealth — for those who already have it.
This is one of the great — and often overlooked — tragedies of our tax code: Congress spends billions of dollars each year on a tax program that is making wealth inequality worse.
According to research by the Corporation for Enterprise Development (CFED), every year the federal government spends more than $660 billion on tax credits, deductions, reduced tax rates, and other measures intended to promote wealth-building activities, such as buying a home, saving for retirement, or investing in higher education. In practice, however, these wealth-building “tax expenditures” — as they are called —grossly favor America’s richest households, ensuring that those with wealth can maintain and grow their assets, while the vast majority of Americans receive next to nothing.
Read more in Next City.