Tax Expenditures, the Size and Efficiency of Government, and Implications for Budget Reform
One possible explanation for the difficulty in controlling the budget is that a major component of spending --tax expenditures--receives privileged status. It is treated as tax cuts rather than spending. This paper explores the implications of that classification and illustrates how it can lead to higher taxes, larger government, and an inefficient mix of spending (too many tax expenditures). The paper then analyzes alternative budgeting approaches that would explicitly incorporate and measure tax expenditures. It concludes by analyzing ways to control tax expenditures (and other spending) and the special challenges presented by tax expenditures.
|Date of creation:||Aug 2011|
|Date of revision:|
|Publication status:||published as Tax Expenditures, the Size and Efficiency of Government, and Implications for Budget Reform , Leonard E. Burman, Marvin Phaup. in Tax Policy and the Economy, Volume 26 , Brown. 2012|
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- Deborah Lucas, 2010. "Measuring and Managing Federal Financial Risk," NBER Books, National Bureau of Economic Research, Inc, number luca07-1, October.
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- Burman, Leonard E. & Rohaly, Jeffrey & Rosenberg, Joseph & Lim, Katherine C., 2010. "Catastrophic Budget Failure," National Tax Journal, National Tax Association, vol. 63(3), pages 561-83, September.
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