GovTalk
February 1, 2010
NAIFA’s Unique Franchise…voters, taxpayers, job creators in every state and district.

Joint Committee Releases Updated Tax Expenditure Report

The Joint Committee on Taxation (JCT) issued its annual tax expenditure report on January 11. The report takes a five year forward look at the amount of revenue the government will not collect as a result of current law deductions, exemptions, exceptions, deferrals and credits contained in the Internal Revenue Code. Life, health and retirement industry products comprise a large portion of tax favored vehicles that Congress could look to as a source of tax revenue to pay for current or new federal programs or to reduce future budget deficits. Concern over budget deficits is increasing.

The tax expenditures that impact the life, health and retirement industries include:

  • Life insurance and annuity inside buildup:  $158.8 billion, with $14.1 billion of that attributable to company-owned life insurance and $144.8 billion attributable to individual-owned life insurance and annuities
  • Pension contributions and earnings:  $533.4 billion—of that, $275.7 billion is attributable to defined benefit plans; $184.3 billion is attributable to defined contribution plans; and $73.4 billion is attributable to plans covering partners and sole proprietors
  • Employer contributions for health care, health insurance premiums, and long-term care premiums:  $568.3 billion
  • Deductible self-employed health insurance and long-term care insurance premiums: $25.1 billion
  • Cafeteria plans: $172.7 billion
  • Exclusion of capital gains at death: $159.4 billion
  • Carryover basis of capital gains on gifts: $35.9 billion
  • Health savings accounts: $6.5 billion
  • IRAs: $59.1 billion for IRAs--$40.7 billion for traditional IRAs and $18.3 billion for Roth IRAs
  • Group term life insurance premiums: $12.4 billion
  • Accident and disability income insurance premiums: $17 billion

Many more tax expenditures impact NAIFA members as business people.

 View the full JCT tax expenditure report (JCS-1-10) here.

NAIFA Staff Contact: Michael Kerley, Senior Vice President – Federal Government Relations, at (703) 770-8155; or Dani Kehoe, NAIFA Outside Counsel.