Tax expenditures impact not only the amount of taxes paid, but who ends up paying them. If you don’t get employer-provided healthcare or your business can’t take advantage of the accelerated depreciation schedule, you or your firm are effectively paying at a higher rate than someone who can use these deductions.
As the discussion on tax reform continues, tax credits and deductions (AKA tax breaks or expenditures) are receiving more attention. Both The Committee for a Responsible Federal Budget and the Tax Foundation have recently run series of articles on this element in the tax code. Earlier this summer, Max Baucus and Orrin Hatch of the Senate Committee on Finance wrote their Senate colleagues, proposing that the discussion of tax reform start with a “blank slate;” that is, assuming ...
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