call tax deduction loopholes "Expenditures"? Such “loopholes and subsidies” are formally called tax expenditures. The name comes from the fact that they are arithmetically equivalent to spending government money. In 2008 - these are the specific deductions (tax expenditures" 1) Exclusion of employer medical insurance premiums and medical care $131 billion 2) Net exclusion of pension contributions and earnings $117.7 3) Mortgage interest on owner-occupied homes $88.5 4) Accelerated depreciation of machinery and equipment $55.9 5) Deductibility of non business state and local taxes $49.1 6) Deductibility of charitable contributions $46.8 7) Deferral of income from controlled foreign corporations $31.5 8) Capital gains exclusion on home sales $30.0 9) Deductibility of State and local property tax on owner-occupied homes $29.1 10) Child credit $28.4 11) Capital gains (except agriculture,timber, and coal) $24.2 12) Step-up basis of capital gains at death $21.5 What are the largest tax expenditures? Remember the govt. considers them "expenditures" because ALL the income EVERYONE makes is considered the "government's Income".. So when you deduct your charitable donations or deduct your mortgage interest, the govt. considers that a loss or "expenditure " against initial taxable income! The point is.. the government considers ALL income belongs to the govt. and you the worker can deduct child credit as a cost or "expenditure"!!!