(Bloomberg Business) — The federal government spent $384 billion in 2013 on tax incentives that encourage savings, linked mainly to home ownership and retirement plans. Most of that money went to the rich, according to a new Urban Institute report.
The highest-earning fifth of U.S. taxpayers got about two-thirds of the tax refunds and exemptions on things like mortgage interest and property taxes in the current U.S. tax code, while the bottom fifth received less than 1 percent, the report shows. Households with less income have less to tuck away for a rainy day and often can’t afford to buy a home, so they are less able to take advantage of these tax breaks.
Both Republicans and Democrats have talked for years about reforming the U.S. tax code, but agreeing which loophole to close is tough.