Research Report Government Spending Undercover
Spending Programs Administered by the IRS
Lily Batchelder, Eric Toder
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In 2011, the U.S. government will spend over $1 trillion on tax expenditures. These programs often fly under the radar of media and public opinion. This paper discusses obstacles to subjecting tax expenditures to the same scrutiny as direct outlays and offers some recommendations for incorporating them in the budget process. It then provides a framework of questions and principles policymakers should consider in evaluating these programs. We conclude that the size of tax subsidies should not be based on a claimant's marginal tax rate or itemizing status, implying that refundable credits are usually the best way to deliver them.

Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy Federal budget and economy Income and wealth distribution
Policy Centers Urban-Brookings Tax Policy Center