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Tax Policy: Tax Expenditures Deserve More Scrutiny

  Premium   Download PDF Now (140 pages)
Report Type Reports and Testimonies
Report Date June 3, 1994
Report No. GGD/AIMD-94-122
Subject
Summary:

At a time when the federal government faces hard choices to reduce the deficit and use available resources wisely, no federal expenditure or subsidy should escape careful review. Tax expenditures, or revenues foregone through preferential provisions in the tax code--for example, deductions, exemptions, and credits--can be a useful part of federal policy, but they should be scrutinized more closely and more often to ensure that, when used, they are the most effective means to an end. This report assesses the growth of federal revenues foregone through income tax expenditures and presents three options for reviewing and controlling their growth: (1) strengthening and extending techniques now used by congressional tax-writing committees, (2) integrating tax expenditures further into the budget process, and (3) reviewing tax expenditures jointly with related federal outlay programs.

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