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Tax Expenditure Estimation and Reporting: A Critical Review

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  • Rosanne Altshuler
  • Robert D. Dietz
Abstract
We examine the measurement of tax expenditures, as well as review issues concerning the classification of tax expenditures generally. We use calculations from NBER's TAXSIM to illustrate some of the problems with the current methodology for estimating tax expenditures. Unlike most previous work on the topic, we focus on how features of the current tax system including the alternative minimum tax and sunset rules complicate and compromise the value of information provided by the tax expenditure budget.

Suggested Citation

  • Rosanne Altshuler & Robert D. Dietz, 2008. "Tax Expenditure Estimation and Reporting: A Critical Review," NBER Working Papers 14263, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:14263
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    References listed on IDEAS

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    1. Carroll, Robert & Joulfaian, David & Mackie, James, 2011. "Income Versus Consumption Tax Baselines for Tax Expenditures," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 491-510, June.
    2. Feenberg, Daniel R. & Poterba, James M., 2004. "The Alternative Minimum Tax and Effective Marginal Tax Rates," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 407-427, June.
    3. Davie, Bruce F., 1994. "Tax Expenditures in the Federal Excise Tax System," National Tax Journal, National Tax Association, vol. 47(1), pages 39-62, March.
    4. Barthold, Thomas A. & Koerner, Thomas & Navratil, John F., 1998. "Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 553-564, September.
    5. Barthold, Thomas A. & Koerner, Thomas & Navratil, John F., 1998. "Effective Marginal Tax Rates Under the Federal Individual Income Tax: Death by One Thousand Pin Pricks?," National Tax Journal, National Tax Association, vol. 51(n. 3), pages 553-64, September.
    6. Davie, Bruce F., 1994. "Tax Expenditures in the Federal Excise Tax System," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 39-62, March.
    7. Ackerman, Jonathan Z. & Altshuler, Rosanne, 2006. "Constrained Tax Reform: How Political and Economic Constraints Affect the Formation of Tax Policy Proposals," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(1), pages 165-187, March.
    8. Altshuler, Rosanne & Dietz, Robert, 2011. "Reconsidering Tax Expenditure Estimation," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 459-489, June.
    9. Todd Sinai & Joseph Gyourko, 2004. "The (Un)changing Geographical Distribution of Housing Tax Benefits: 1980–2000," NBER Chapters, in: Tax Policy and the Economy, Volume 18, pages 175-208, National Bureau of Economic Research, Inc.
    10. Rosanne Altshuler & Robert Dietz, 2008. "Reconsidering Tax Expenditure Estimation: Challenges And Reforms," Departmental Working Papers 200804, Rutgers University, Department of Economics.
    11. Burman, Leonard E., 2003. "Is the Tax Expenditure Concept Still Relevant?," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(3), pages 613-627, September.
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    Cited by:

    1. Shabbar, Shagufta & Ahmed, Qazi Masood & Pasha, Farooq, 2018. "A juxtaposition of Tax Expenditures and Direct Expenditures: Case Study of Pakistan," MPRA Paper 117419, University Library of Munich, Germany, revised 2018.
    2. Tatiana Malinina, 2010. "Recognition and Measurement of Tax Expenditures: International Experience and Russian Practice," Research Paper Series, Gaidar Institute for Economic Policy, issue 146P.
    3. L. Yu. Filobokova & O. V. Grigorieva, 2017. "Strategic approaches to the management of tax potential in small business," Russian Journal of Industrial Economics, MISIS, vol. 10(2).

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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