Reconsidering Tax Expenditure Estimation: Challenges And Reforms
AbstractWe examine the measurement of tax expenditures and offer recommendations aimed at improving their value to analysts and policymakers. We use calculations from NBER’s TAXSIM to illustrate some of the problems with the current methodology for estimating tax expenditures. Unlike most previous work on the topic, we focus on how features of the current tax system complicate and compromise the value of information provided by the tax expenditure budget. Our recommendations for reform include presenting revenue estimates for major tax expenditures, reporting some negative tax expenditures, grouping expenditures by conceptually-linked categories, and establishing an appendix for tax expenditure estimates of permanent versions of expiring provisions and AMT interaction effects.
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Bibliographic InfoPaper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 200804.
Length: 20 pages
Date of creation: 03 Jul 2008
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tax expenditures; tax incentives; tax revenues;
Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
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