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15. Other Expense
Total other expense includes the following components (dollars in millions):
For the Years Ended December 31,
2015 2014 2013
Postage ............................................................................................................................... $ 84 $ 84 $ 86
Fraud losses and other charges(1) ........................................................................................... 112 134 110
Supplies .............................................................................................................................. 37 23 26
Credit-related inquiry fees ..................................................................................................... 20 19 19
Litigation expense ................................................................................................................ 18 — (12)
Incentive expense ................................................................................................................. 27 50 61
Other expense ..................................................................................................................... 191 165 198
Total other expense .......................................................................................................... $ 489 $ 475 $ 488
(1) Includes fair value adjustment of $21 million resulting from recording Diners Club Italy as held for sale for the year ended December 31, 2014.
16. Income Taxes
Income tax expense consisted of the following (dollars in millions):
For the Years Ended December 31,
2015 2014 2013
Current
U.S. federal ..................................................................................................................... $ 1,245 $ 1,215 $1,065
U.S. state and local .......................................................................................................... 143 167 87
Total ........................................................................................................................... 1,388 1,382 1,152
Deferred
U.S. federal ..................................................................................................................... (69) (7) 295
U.S. state and local .......................................................................................................... (4) (4) 27
Total ........................................................................................................................... (73) (11) 322
Income tax expense .................................................................................................. $ 1,315 $ 1,371 $1,474
The following table reconciles the Company’s effective tax rate to the U.S. federal statutory income tax rate:
For the Years Ended December 31,
2015 2014 2013
U.S. federal statutory income tax rate ..................................................................................... 35.0% 35.0%35.0%
U.S. state, local and other income taxes, net of U.S. federal income tax benefits ........................ 2.5 2.8 2.2
Other .................................................................................................................................. (1.1) (0.7) 0.2
Effective income tax rate ................................................................................................... 36.4% 37.1%37.4%