Jon Perr at Crooks and Liars does a nice review on defining who benefits the most from tax breaks: CBO Study Shows Tax Breaks Favor the Rich
“Every year, tax expenditures–Uncle Sam’s myriad credits, exclusion, loopholes and breaks–cost the U.S. Treasury over $1 trillion a year. To put that in perspective, that figure is greater than the cost of Medicare, Social Security and national defense. Much larger than this year’s projected budget deficit of $642 billion, tax expenditures equal roughly 30 percent of federal spending. It’s no wonder why Republicans are so fond of calling for closing loopholes while lowering rates to produce “revenue-neutral” tax reform.
Jon goes on to add:
But a new study of the top 10 tax expenditures also show why GOP leaders including Mitt Romney, Paul Ryan, and House Ways and Means Committee Chairman Dave Camp refuse to name a single loophole they would close to achieve it. As the new Congressional Budget Office (CBO) analysis shows, half the value of those $900 billion in tax breaks goes to the top quintile of American income earners. Nevertheless, their elimination would devastate lower and middle income households.
But while the well-to-do pocket over half of the windfall produced by the numerous breaks in the tax code, the standard of living of lower-income working families is much more dependent on them. The Earned Income Tax Credit (EITC), which President Ronald Reagan called “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress,” provides almost all of $61 billion in annual benefits to the bottom 60 percent of taxpayers. Overall, the major expenditures account for almost 12 percent of the income for the bottom quintile of earners.