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Preview of www.nber.org
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The US government's difficulty in controlling its budget may be due to the privileged status of tax expenditures, which are treated as tax cuts rather than spending. This classification can lead to higher taxes, a larger government, and an inefficient mix of spending. Tax expenditures, such as the tax subsidy for employer-sponsored health insurance, are popular and growing fast, but their costs are largely invisible to policymakers and citizens. The paper explores the implications of this classification and analyzes alternative budgeting approaches that would explicitly incorporate and measure tax expenditures, as well as ways to control them.

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The US government's difficulty in controlling its budget may be due to the privileged status of tax expenditures, which are treated as tax cuts rather than...

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  • File Format: PDF
  • File Size: 478 KB
  • Pages: 38
  • Language: EN
  • Total Downloads: 54
  • Last Updated: 1 week ago

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