An article from the Peter G. Peterson Foundation points out an aspect of the income/payroll tax system that has helped allow it to continue to exist – that aspect is tax breaks. The article makes these points:
* The United States lost an estimated $2.2 trillion in revenue through tax expenditures, commonly known as tax breaks, in 2025.
* According to the Joint Committee on Taxation (JCT), tax exemptions “include any reduction in income tax liability that results from special tax provisions or regulations that provide tax benefits to particular taxpayers”.
* In 2025, the federal government collected $3.1 trillion in individual and corporate taxes. At the same time, the tax code generated $2.2 trillion in tax breaks – more than was spent on Social Security, Medicare, defense or any other program.
* The breaks exceeded the size of the $1.8 trillion deficit in 2025 by $444 billion.
* JCT estimated that in 2025, 84 percent of the tax benefits from deductions for state and local taxes, charitable contributions and mortgage interest went to taxpayers with incomes over $250,000.
* The cost of tax expenditures increased by $296 billion in 2025 over the last year, and JCT estimated that the cost will continue to grow over the next four years. In fact, the cost of tax expenditures grew 15 percent. That is more than the growth in:
- Social Security (8 percent)
- Medicare (14 percent)
- Medicaid and other health (7 percent)
- National defense (5 percent)
Each of the “tax expenditures – deductions” is designed to placate certain Americans and keep them from joining the millions of other Americans that want to eliminate the income/payroll tax system. One of the reasons the current tax system has been able to survive for so many years is because select groups have been paid off with these deductions and have been convinced that somehow they are paying less than others.
It’s time to put the current income/payroll tax system out of business and replace it with a much fairer system – the FAIRtax.
For more information please go to FAIRtax.org
