Research report Evaluating Tax Expenditures
Subtitle
Introducing Oversight into Spending through the Tax Code
Benjamin H. Harris, C. Eugene Steuerle, Caleb Quakenbush
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Increased demand for better use of evidence in policymaking has sparked bipartisan support for better evaluation of federal spending programs. Tax expenditures, spending-like subsidies embedded in the tax code, cost taxpayers roughly as much as domestic discretionary programs, yet receive little-to-no scrutiny from government evaluators. Many large tax expenditures have existed for decades with limited reform, despite independent research often finding them to be inefficient at achieving their purported goals. After a brief overview of tax expenditures, we review the evaluative tools and offices government has at its disposal and suggest options lawmakers could use to conduct regular evaluation of tax subsidies in pursuit of leaner, more effective government. This paper was updated on July 26, 2018 to clarify the roles of the Joint Committee on Taxation and the Congressional Research Service in estimating and evaluating tax expenditures.
Primary topic Federal Budget and Economy
Research Area Federal Budget and Economy