{"id":65,"date":"2015-02-04T11:53:00","date_gmt":"2015-02-04T17:53:00","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/2015\/02\/more-on-tax-reform-and-tax-expenditures.html"},"modified":"2015-02-24T21:22:10","modified_gmt":"2015-02-25T03:22:10","slug":"more-on-tax-reform-and-tax-expenditures","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/02\/more-on-tax-reform-and-tax-expenditures.html","title":{"rendered":"More on tax reform and “tax expenditures”"},"content":{"rendered":"\n<\/head>

So the other day I wrote up some initial thoughts on tax reform<\/a>, and what kinds of differential-treatment in the tax code could be removed as a part of an overall reform project. \u00a0And this morning I observed<\/a> that the president\u2019s budget plays lots of games with taxes in the budget (that is, moving government \u201cspending\u201d from a tax deduction to a benefit targeted at lower-income groups, e.g., with respect to child care). \u00a0But here\u2019s one thing I did find in the mess of budget documents at the White House site: \u00a0a report<\/a> on \u201ctax expenditures.<\/p>\n

The two key paragraphs:<\/p>\n

The Congressional Budget Act of 1974 (Public Law 93\u2013344) requires that a list of \u201ctax expenditures\u2019\u2019 be included in the budget. Tax expenditures are defined in the law as \u201crevenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.\u2019\u2019 These exceptions may be viewed as alternatives to other policy instruments, such as spending or regulatory programs. \u00a0<\/p><\/blockquote>\n

Identification and measurement of tax expenditures depends crucially on the baseline tax system against which the actual tax system is compared. The tax expenditure estimates presented in this document are patterned on a comprehensive income tax, which defines income as the sum of consumption and the change in net wealth in a given period of time.<\/p><\/blockquote>\n

Which means that, per this definition, the \u201cbaseline\u201d is a flat tax.<\/p>\n

The standard deduction and exemptions are \u201ctax expenditures.\u201d<\/p>\n

And reduced tax rates for lower levels of income are \u201ctax expenditures.\u201d<\/p>\n

Now, the report doesn\u2019t see it that way. \u00a0They treat these items as part of the baseline. \u00a0And perhaps the full text of the law spells out that these items are indeed to be a part of the baseline. \u00a0But (I\u2019m feeling contrarian today) why should they be? <\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

So the other day I wrote up some initial thoughts on tax reform, and what kinds of differential-treatment in the tax code could be removed as a part of an overall reform project. \u00a0And this morning I observed that the president\u2019s budget plays lots of games with taxes in the budget (that is, moving government […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[38],"class_list":["post-65","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-tax-reform"],"yoast_head":"\nMore on tax reform and "tax expenditures"<\/title>\n<meta name=\"description\" content=\"So the other day I wrote up some initial thoughts on tax reform, and what kinds of differential-treatment in the tax code could be removed as a part of an\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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