About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

84 IRET Policy Bulletin 1 (2001)

handle is hein.taxfoundation/iretpbul0043 and id is 1 raw text is: June 13, 2001 No. 84 THE END OF TAX EXPENDITURES AS WE KNOW THEM? Introduction In its 2002 budget, the Bush Administration launched a stealth attack on the concept of tax expenditures. The Reagan Administration made a similar effort in 1982, only to backtrack in the face of criticism and continue with the status quo henceforth. Although the Bush effort has come in for criticism as well, observers believe that it is much more likely to stick to its guns. A key reason is that in the years since the Reagan initiative, various aspects of tax expenditures have been heavily critiqued by tax theorists, both economists and legal scholars. If the Bush Administration stands up to the critics and presses forward with its attack on the way tax expenditures have been calculated and used, it could have a very profound, long-term effect on future tax policy in the United States. Origin of Tax Expenditures Ever since the beginning of the federal income tax in 1913, there have been deductions and exclusions that caused taxable income to be less than gross income. For example, the very first income tax return allowed deductions for all interest paid, state and local taxes paid, and depreciation. Economists have always been interested in these deductions and exclusions because of their impact on the distribution of the tax burden, their incentive effects and their impact on overall revenue.1 However, until the 1960s there was no comprehensive catalogue of tax preferences, nor a standard method for analyzing them. This situation began to change when Stanley Surrey, a professor of law at Harvard University, became assistant secretary of the Treasury for tax policy during the Kennedy Administration. Surrey believed strongly that many provisions of the Tax Code had economic effects identical to government spending. However, as part of the Tax Code, they came under much less scrutiny than did spending programs. Surrey sought to create a method whereby tax provisions and spending programs could be reviewed simultaneously by Congress in order to improve the policymaking process.2 Institute for IRET is a non-profit, tax exempt 501(c)3 economic policy research and educational Research organization devoted to informing the public about policies that will promote on the economic growth and efficient operation of the market economy. Economics of 1730 K Street, N.W., Suite 910 * Washington, D.C. 20006 Taxation (202) 463-1400. Fax (202) 463-6199 * Internet www.iret.org

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most