Raising Revenue by Limiting Tax Expenditures

Martin Feldstein

No 20672, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Limiting tax expenditures can raise revenue without increasing marginal tax rates. Such a policy is equivalent to reducing government spending now done as subsidies through the tax code for a wide range of household spending and income. This paper explores one way of limiting tax expenditures: a cap on the total reduction in tax liabilities that each individual can achieve by the use of deductions and exclusions. The analysis describes the revenue effects and the distributional consequences of such a cap, and examines the sensitivity of these results to various design features.

JEL-codes: H2 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-pbe and nep-pub
Note: PE
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Published as Raising Revenue by Limiting Tax Expenditures , Martin Feldstein. in Tax Policy and the Economy, Volume 29 , Brown. 2015

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Chapter: Raising Revenue by Limiting Tax Expenditures (2014)
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