While much of Washington is consumed by the debate over tax cuts scheduled to expire next year, a big package of tax breaks already expired this year. Among the biggest, along with the cost to retroactively extend each one for 2012 and 2013:
Individual tax breaks
— Relief from the Alternative Minimum Tax. The tax is designed to ensure that wealthy people can’t use tax breaks to avoid paying any federal taxes. However, it was never indexed for inflation, so Congress routinely adjusts it to keep it from imposing hefty tax increases on millions of middle-income families. Cost: $132 billion.
— State and local sales tax deduction. Taxpayers can take this itemized deduction instead of deducting state and local income taxes. It is geared for people who live in states without state income taxes: Alaska, New Hampshire, Tennessee, Florida, South Dakota, Washington, Nevada, Texas and Wyoming. Cost: $4.4 billion.
— A deduction of up to $4,000 for qualified higher education expenses: Cost: $4.2 billion.
— A tax credit for improvements to make homes more energy efficient. Cost: $2.4 billion.