Tax Expenditure Management: A Critical Assessment (cambridge Tax Law Series)

A tax expenditure is a 'tax break' allowed to a taxpayer or group of taxpayers, for example, by way of concession, deduction, deferral or exemption. The tax expenditure concept, as it was first identified, was designed to demonstrate the similarity between direct government spending on the one hand and spending through the tax system on the other. The identification of benefits provided through the tax system as tax expenditures allows analysts to consider the fiscal significance of those parts of the tax system which do not contribute to the primary purpose of raising revenue. Although a seemingly simple concept, it has generated a range of complex definitional and practical issues, and this book identifies and critically assesses the controversial aspects of tax expenditure and tax expenditure management. A tax expenditure is a 'tax break' allowed to a taxpayer or group of taxpayers, for example, by way of concession, deduction, deferral or exemption. This book deals with how a tax expenditure might be defined and managed in a modern democracy. The book is broadly divided into two parts. The first part introduces the tax expenditure concept, reviews the existing literature and considers the range of intractable controversies. Furthermore, it examines the different approaches to defining the tax expenditure concept and also to identifying tax expenditures, and surveys contemporary tax expenditure management practices. The second part considers the significance of tax expenditures from various perspectives while acknowledging the empirical difficulties with quantifying the impacts of tax expenditures. It looks back over the theoretical controversies and considers the political challenges. The final chapter reviews the preceding chapters before setting out what the authors think should be considered during the democratic deliberation upon a community's approach to tax expenditure management A tax expenditure is a 'tax break' allowed to a taxpayer or group of taxpayers, for example, by way of concession, deduction, deferral or exemption. This book identifies the complex definitional and practical issues the concept generates and critically assesses the controversial aspects of tax expenditure and tax expenditure management. Title page 4 Copyright page 5 Table of contents 6 Acknowledgements 9 1 Introduction 10 2 The tax expenditures concept 24 3 Reporting on tax expenditures 74 4 The practical significance of tax expenditures 112 5 The politics of tax expenditure management 156 6 Managing tax expenditure controversies 212 Bibliography 241 Index 258 Locates tax expenditure management within the broader discourse of liberal democratic political theory