Tuesday, August 27, 2013

USA TAX | Fed Exemptions Double, 1994-2009 (Updated May 26, 2016)

Tax exemptions reduce the amount of tax revenue that governments get from income, sales or property taxes. 

They are called "tax expenditures". Legislators love 'em, because:

  • They are hidden from view.
  • They benefit a favored group of companies or individuals who are thereby indebted to the legislators...
U.S. Government tax expenditures have doubled in 15 years–from about $600 billion during the early Clinton years to $1.2 trillion in the Obama Administration. The consequence is that the lost revenues must be offset in one of three ways: 
(1) more tax revenues must be raised by adding new taxes or raising tax rates on existing taxes; OR
(2) expenses must be cut; OR 
(3) the government must make up the difference by incurring a deficit and borrowing to cover it.

Don't blame Obama for this. They have been flat during his administration. Tax expenditures started rising at the end of the Clinton administration and soared after 2000 at the beginning and end of the George W. Bush administration. 

That's the long story short. For details, go to A Brief History of Tax Expenditures published by the Tax Foundation, which is an organization that grieves for public tax burdens and seek to inform the public about why they should take it personally. There is a podcast available here. To subscribe via RSS, click here.

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