tax structure of the individual income tax includes one personal exemption for each taxpayer, and one for each dependent; the standard deduction, which serves as a general minimum deduction for all taxpayers; the existing tax rate schedule; the limit on using passive losses to offset other income; and deductions for costs incurred in producing net income, e.g., investment expenses or the cost of the tools that a mechanic purchases for his job. In addition to preparing estimates of Federal tax expenditures, the staff of the Joint Committee on Taxation has written an extensive discussion of the measurement of tax expenditures, problems in measurement, and other measurement issues. This discussion also appears in the April 22, 1993, tax expenditure report. In addition, other tables included in that report provide distributional data for tax expenditures. Tax expenditures are grouped in the following table in the same functional categories as outlays in the Federal budget. Estimates are shown separately for individuals and corporations. Those tax expenditures that do not fit clearly into any single budget category have been placed in the most appropriate category. Several of the tax expenditure items involve small amounts of revenue, and those estimates are indicated by footnote 1. For each of these items, the footnote means that the tax expenditure is less than $50 million in the fiscal year. Table 1 is based on the tax laws as they existed on January 1, 1993, and is reprinted from the Joint Committee on Taxation's April 22, 1993, tax expenditure report. TABLE 1.-TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 1994-1998 Exclusion of interest on State and local government industrial development bonds for energy production facilities 0.1 Expensing of tertiary injectants Exclusion of energy conservation subsidies provided by public utilities Credits for investments in solar and geothermal energy facilities Credits for electricity production from wind and biomass Deductions and credits for clean-fuel vehicles and refueling property Natural resources and environment Expensing of exploration and development costs, nonfuel minerals Excess of percentage over cost depletion, nonfuel minerals 0.2 0.5 0.3 0.3 0.2 0.2 0.8 0.9 0.9 (1) 0.1 0.1 0.1 (1) ེ= 0.1 0.2 0.1 0.1 0.1 (1) 0.5 0.5 (1) 0.3 0.2 (1) 0.9 0.3 0.3 (1) () 0.1 0.2 0.3 0.1 (1) 0.3 0.3 0.1 0.1 0.2 2.0 1.3 0.3 0.3 5.7 0.2 0.2 1.2 0.1 0.7 0.3 0.2 0.3 0.3 1.3 TABLE 1.-TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 1994-1998-Continued Investment credit and 7-year amortization for reforestation expenditures Expensing of multiperiod timber-growing costs Exclusion of interest on State and local government sewage, water, and hazardous waste facilities bonds 0.3 Exclusion of cancellation of indebtedness income of farmers 0.2 0.1 Cash accounting for agriculture 0.1 0.1 0.1 0.1 0.1 0.2 Commerce and housing 0.6 0.5 2.3 Insurance companies: Exclusion of investment income on life insurance and annuity con Deduction of unpaid property loss reserve for property and casualty insurance companies Special alternative tax on small property and casualty insurance com 0.7 0.8 0.9 1.0 1.1 7.4 8.2 9.0 9.9 10.9 49.7 0.1 0.1 1.5 (1) 0.1 0.3 0.3 (1) 2.3 2.5 1.6 0.1 0.1 0.8 Exclusion of capital gains on sales of principal residences for persons age 55 and over ($125,000 exclusion) Exclusion of interest on State and local governments bonds for owner- 0.5 0.5 0.5 0.4 0.4 1.2 Exclusion of interest on State and local government bonds for rental 0.3 Depreciation of rental housing in excess of alternative depreciation 0.3 0.3 0.4 0.4 0.8 1.0 Other business and commerce: Maximum 28% tax rate on long-term capital gains 3.8 Depreciation of buildings other than rental housing in excess of alter Exclusion of interest on State and local government small-issue in Deferral of gains from sales of broadcasting facilities to minority- Transportation Deferral of tax on capital construction funds of shipping companies Exclusion of employer-provided transportation benefits Community and regional development Investment credit for rehabilitation of structures, other than historic structures Exception from net operating loss limitations for corporations in bank 1.5 (1) 0.2 3.7 3.9 0.2 ( 0.5 0.5 0.2 0.2 (1) .......... TABLE 1.-TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 1994-1998-Continued Exclusion of interest on State and local government bonds for private air- 0.7 Exclusion of interest on State and local government student loan bonds 0.1 0.1 0.1 0.1 0.1 0.3 Exclusion of interest on State and local government bonds for private Deductibility of charitable contributions for educational institutions Employment: Exclusion of employee meals and lodging (other than military) Deductibility of charitable contributions, other than for education and 0.7 0.7 0.8 0.3 0.8 0.9 1.8 0.2 0.6 0.6 (1) () 6.7 8.5 10.6 0.2 0.3 4.9 5.2 0.1 0.1 0.1 0.7 0.7 12.6 0.3 0.3 5.5 0.6 0.6 1.1 2.0 11.1 5.3 43.9 25.9 |