These include deductions for state and local property and income taxes, mortgage interest, medical expenses, and charitable deductions. Child care deductions are another tax expenditure that is set up to provide extra benefits for lower income people. The above graph illustrates the distribution of benefits from these two programs. Tax expenditures, while capable of helping low income people, offer more benefits to those with very high incomes. A special type of tax expenditure, is a reduction of the tax rate on capital gains.
Capital gains are the profits made from selling capital.
Proponents claim this encourages investment. Such a assertion defies logic, because one can only take advantage of the capital gain by selling the investment. The wealthiest obtain the most benefits from a capital gains tax reduction. Brown would include an earned income tax credit. This flattens out the progressive tax structure.