This year, spending through tax expenditures will total more than $1 trillion. Incorporating greater transparency, scrutiny, and oversight into the tax expenditure process will cut billions in wasteful tax subsidies and maximize bang for every taxpayer buck. This year, about 60% of government spending for energy will be enacted through the tax code.
"Audit the Tax Code: Doing What Works for Tax Expenditures." The framing essay lays out the framework that CAP’s new Doing What Works project will use to examine tax expenditure spending. The Doing What Works project was launched in February with the support of the Rockefeller Foundation’s Campaign for American Workers.
"America’s Hidden Power Bill: Examining Federal Energy Tax Expenditures." This report details how tax expenditures affect the energy industry. It argues that the government could more effectively promote desirable energy policies with more transparency, evaluation, measurement, and oversight in regards to tax expenditures.
"Government Spending Undercover: Spending Programs Administered by the IRS." This paper describes tax expenditure spending programs, explains why they should be viewed just like other forms of government spending, and outlines the obstacles to treating them the same as other spending.
"Cracking the Code: A Closer Look at Tax Expenditure Spending." This memo takes a hard look at tax expenditures and reveals some surprising results; here are 10 tax expenditures that illustrate the importance of examining this form of spending more closely.
"It’s ridiculous that tax expenditures subsidize businesses that purchase SUVs and the purchase of vacation homes. Tax expenditure spending is more than 25 percent of the government’s total budget. There is an enormous amount of potential to save billions and improve government efficiency if we can scrub down on that 25 percent. Resources are scarce, and no stone should be left unturned," said Sima Gandhi, CAP Senior Policy Analyst.
The best way to do this, Gandhi argues, is for tax expenditures to be evaluated and measured like other forms of government spending. This would empower federal lawmakers with the information needed to cut waste, develop responsible budget plans, and improve delivery of governmentwide priorities.
With tax expenditure spending amounting to more than $1.2 trillion, establishing value for American taxpayers must be a priority. As Reece Rushing, who is leading the project and is CAP’s Director for Government Reform, said, “Part of building a more effective and efficient government is treating tax expenditures like spending. Getting that message across is an important part of this project."
Tax expenditures must be integrated into discussions on energy policy spending to advance smarter government that efficiently allocates scarce resources and achieves greater results. Taxpayers should know their dollars are supporting programs that work and that deliver results for them.