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Tax Expenditures and Employee Benefits: Estimates from the FY 2007 Budget

12 Pages Posted: 20 Apr 2006  

Kenneth J. McDonnell

Employee Benefit Research Institute (EBRI)


The federal government supports the provision of employee benefits through preferential tax treatment in the Internal Revenue Code. There are three types of tax treatments for employee benefits: tax exemption, tax deferral, and other preferential treatment. The Congressional Budget Act of 1974 (P.L. 93-344) requires that a list of tax expenditures (federal tax revenue forgone due to preferential provisions) be included in the budget. This paper includes a listing of the employee benefits tax expenditures, as published in President Bush's Fiscal Year 2007 budget, prepared by the White House Office of Management and Budget, using a methodology that is flawed but mandated by Congress.

Keywords: Employment-based benefits, Tax expenditures, United States budget

JEL Classification: E62, H61

Suggested Citation

McDonnell, Kenneth J., Tax Expenditures and Employee Benefits: Estimates from the FY 2007 Budget. EBRI Notes, Vol. 27, No. 4, April 2006. Available at SSRN:

Kenneth J. McDonnell (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

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