The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Tax Expenditures

  • Daniel N. Shaviro
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2084

Abstract

Labelling certain provisions in the tax law as tax expenditures has been criticized for lacking an ‘agreed conceptual model’ for distinguishing between integral tax rules and interpolations reflecting spending rather than tax policy. However, the tax expenditure concept can be reformulated as relying on a distinction between (a) the distributional goals that might underlie the use of a tax base such as income or consumption, and (b) allocative goals such as encouraging particular activities or investments. Tax expenditure estimates could be prepared using both measures, including negative tax expenditures (that is, tax penalties) as well as positive ones.

Keywords

Consumption tax base Consumption taxation Haig–Simons income taxation Income tax base Tax expenditures Tax penalties Taxation of corporate profits Taxation of income 
This is a preview of subscription content, log in to check access

Bibliography

  1. Bittker, B. 1969. Accounting for federal ‘tax subsidies’ in the national budget. National Tax Journal 22: 244–261.Google Scholar
  2. Musgrave, R. 1959. The theory of public finance. New York: McGraw Hill.Google Scholar
  3. Shaviro, D. 2004. Rethinking tax expenditures and fiscal language. Tax Law Review 57: 187–232.Google Scholar
  4. Surrey, S. 1973. Pathways to tax reform. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  5. Surrey, S., and P. McDaniel. 1985. Tax expenditures. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  6. United States Government. 2003. Tax expenditures. Ch. 6 in fiscal year 2003. Budget of the United States government. Analytical perspectives. Online. Available at http://www.gpoaccess.gov/usbudget/fy03/pdf/spec.pdf. Accessed 9 Feb 2007.

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Daniel N. Shaviro
    • 1
  1. 1.