These programs offer businesses and people special tax treatment: credits, deductions, exclusions, exemptions, deferrals, and preferential rates.
The government uses both tax expenditures by taking all taxpayer dollars and giving them to others to spend for a specific purpose. It uses tax expenditures to accomplish the same goals as direct spending (giving money), but it instead transfers money by lowering taxes for an individual or company.
Tax expenditures are not subject to the same annual appropriations process as other forms of spending. This means they are less likely to be scrutinized.
Do you hear any serious discussion on reducing tax expenditures?
Why?
Members of Congress tend to pursue their priorities through tax expenditures because they appear to the American People as tax cuts instead of spending increases.
The cost of tax expenditures has dramatically increased over the last 20 years partly because they are excluded from the budget process and because they pretend to be tax cuts.
Tell your congressperson you want tax expenditures subject to the annual budget evaluation process. And that you desire Congress to report annually of the costs and the benefits of each tax expenditure (spending) so one can consider which tax expenditures are worthy of keeping and which ones need to be eliminated.
Spending programs delivered through tax expenditures should be subject to the same level of scrutiny as direct spending programs. Tax expenditures need to be delivered efficiently and if they don't work they need to be cut the same as ineffective spending programs.
Tax expenditures, defined as monies taken by government by fiat, as taxes, for the purpose to dispensing to various people who 'need' it (redistribution). Accordingly, these expenditures are just another way for politicians to 'buy' votes (currently, the easiest way to garner votes). Our politicians have leaned the way to stay in power: promise 'free lunches' (goods and services provided to the masses). That's a shame, because we will suffer as a nation for this utilitarian expenditure of funds beyond that which our Constitution described.
ReplyDeleteIt's troubling to me that we view taxes as 'free' money when that money is taken from whatever purpose the individual would've put it to if it weren't seized.
The best thing we could do is to stop the growth of the government; keep this money in the private sector, and allow people to make their lives as best they can. Otherwise, we are doomed to a return to earlier centuries.
We have crested as a species it seems; everywhere is down from here.
(Oh, lighten up! I say! Enjoy this excellent bit of video! Hayek, Friedman and Laffer are the men! Go, Ludwig Von Mises~!)
Hayek's work is a bit displaced for me today. If we lived in the year 1750 he rocks. I like his contributions to systems thinking.
ReplyDeleteKnew we would agree on small & effective government. Also agree if the tax is not needed to reduce debt and or improve the general welfare of the nation it ought never to be collected.
Today we've had >10 years of insufficient income which will not be brought under control by cuts in services alone.
Tax Expenditures need equal scrutiny.