July 1, 1994

A Survey on Tax Expenditures

Download Special Report No. 37

Special Report No. 37

Executive Summary A recent General Accounting Office (GAO) report suggested, by its title that “Tax Expenditures Deserve More Scrutiny.” The GAO report may, in fact, encourage Congress to scrutinize tax expenditures more carefully. At the same time, however, the debate on tax expenditures may encourage further debate on tax neutrality and tax surcharges. In conjunction with other ongoing work in tax policy, the tax expenditure debate may also provide an important dimension of any future tax reform effort.

Tax expenditures are calculated by both the Joint Tax Committee OTC) of Congress and by the Department of Treasury. As the GAO clearly states in its report, however, there is no consensus about what constitutes a tax expenditure. To investigate the question of what is a tax expenditure, the Tax Foundation mailed a survey to the Tax Directors, Tax Vice-Presidents, and Senior Partners of its contributing companies. This sample of America’s tax practitioners includes representatives from many different businesses in many different industries and from companies of many different sizes. This report discusses some of the issues surrounding tax expenditures and presents the results of the survey.