The End of Tax Expenditures as We Know Them?

Tax Notes, Vol. 92, No. 3, July 16, 2001

IRET Policy Bulletin, No. 84, June 13. 2001

19 Pages Posted: 13 Jul 2001 Last revised: 18 Oct 2010

Date Written: October 16, 2010


In its fiscal 2002 budget, the Bush administration criticized the presentation of tax expenditures. In this article, Bartlett argues that the tax expenditures concept deserves serious criticism. It is based on the notion that there is some generally accepted "normal" tax system against which to judge deviations from it. In fact, there is no such agreement. Reputable tax experts disagree strenuously on questions of what provisions either belong or do not belong in a normal tax structure. Therefore, the tax expenditures list is essentially arbitrary. But because it still embodies the biases of those who first developed the concept, there are normative consequences to the very existence of a tax expenditures budget. In particular, the underlying acceptance of income, rather than consumption, as the reference tax base sanctions the excessive taxation of capital.

Bartlett also raises technical questions about the measurement of tax expenditures and the lack of consistency in the listing of certain provisions, while leaving out others. He concludes that the Bush administration is on the right track and suggests that in attacking the tax expenditures concept, it may be laying the intellectual groundwork for a tax reform proposal that would shift the tax code more toward a consumption base.

IRET is a nonprofit tax-exempt 501(c)(3) economic policy research and education organization devoted to informing the public about policies that will promote economic growth and efficient operation of the market economy.

Suggested Citation

Bartlett, Bruce, The End of Tax Expenditures as We Know Them? (October 16, 2010). Tax Notes, Vol. 92, No. 3, July 16, 2001, IRET Policy Bulletin, No. 84, June 13. 2001, Available at SSRN:

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