Tax expenditure
Government spending through the tax code / From Wikipedia, the free encyclopedia
Dear Wikiwand AI, let's keep it short by simply answering these key questions:
Can you list the top facts and stats about Tax expenditures?
Summarize this article for a 10 year old
Tax expenditures are government revenue losses from tax exclusions, exemptions, deductions, credits, deferrals, and preferential tax rates. They are a counterpart to direct expenditures, in that they both are forms of government spending.
The examples and perspective in this article may not represent a worldwide view of the subject. (March 2015) |
Tax expenditures function as subsidies[1] for certain activities the affect both axis of equity of the basic tax system by giving preferential treatment to those activities. For instance, two people who have the same income can have different effective tax rates if one of the tax payers qualifies for certain tax expenditures by owning a home, having children, or receiving employer-provided health care and pension insurance.