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spelling okr-10986-113272021-04-23T14:02:55Z Why Worry About Tax Expenditure? Swift, Zhicheng Li Cavalcanti, Carlos B. ACCOUNTING BUDGET PROCESS DEDUCTIONS ECONOMIC DEVELOPMENT ECONOMICS EFFECTIVE TAX RATES ENTITLEMENTS EXPENDITURES FEDERAL GOVERNMENT FISCAL FISCAL TRANSPARENCY GOVERNMENT BUDGETS GOVERNMENT EXPENDITURES GOVERNMENT SPENDING INCOME INCOME TAX MINISTERS MINISTRY OF FINANCE POLICY RESEARCH PRESIDENCY PRIVATE SECTOR PRIVATE SECTOR PARTICIPATION PRODUCERS PROVISIONS PUBLIC EXPENDITURE SOCIAL DEVELOPMENT SOCIAL PROGRAMS TAX TAX ADMINISTRATION TAX BASE TAX BENEFITS TAX BRACKETS TAX DEDUCTION TAX EXPENDITURE TAX EXPENDITURES TAX LAWS TAX LIABILITIES TAX PAYMENTS TAX RATE TAX RATES TAX REGIME TAX RETURNS TAX REVENUE TAX REVENUES TAX SYSTEM TAXABLE INCOME TAXATION TAXPAYERS TAX EXPENDITURES BENCHMARKS TAX ADMINISTRATION FISCAL POLICIES POLICYMAKERS TAX EXEMPTIONS ALLOWANCES CREDITS DEFERRALS TAX DEDUCTION CHARITABLE CONTRIBUTIONS UNSKILLED WORKERS GOVERNMENT BUDGETS Tax expenditures are concessions that fall outside tax norms or benchmarks. These norms include accounting conventions, the structure of tax rates, the deductibility of compulsory payments, provisions to facilitate tax administration, and norms related to international fiscal obligations. Tax expenditures are deviations from these norms, implemented to encourage behavior deemed desirable by policymakers, and can take a number of forms-including tax exemptions, allowances, credits, deferrals, and relief (see OECD 1996). The classic example is a tax deduction for charitable contributions, where the reduction in tax revenue is more than offset by the increase in support for charitable activities. Tax expenditures are not a free lunch, however. They can lead to inefficiencies and inequities, stimulating no additional activity and making the tax regime more regressive. For instance, a tax concession granted to employers who hire unskilled workers might go to employers who would have hired such workers anyway. Tax expenditures also affect government budgets, because they imply forgoing revenue that could be used to fund direct government expenditures. 2012-08-13T14:46:08Z 2012-08-13T14:46:08Z 2003-01 http://documents.worldbank.org/curated/en/2003/01/2518855/worry-tax-expenditure http://hdl.handle.net/10986/11327 English PREM Notes; No. 77 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCOUNTING
BUDGET PROCESS
DEDUCTIONS
ECONOMIC DEVELOPMENT
ECONOMICS
EFFECTIVE TAX RATES
ENTITLEMENTS
EXPENDITURES
FEDERAL GOVERNMENT
FISCAL
FISCAL TRANSPARENCY
GOVERNMENT BUDGETS
GOVERNMENT EXPENDITURES
GOVERNMENT SPENDING
INCOME
INCOME TAX
MINISTERS
MINISTRY OF FINANCE
POLICY RESEARCH
PRESIDENCY
PRIVATE SECTOR
PRIVATE SECTOR PARTICIPATION
PRODUCERS
PROVISIONS
PUBLIC EXPENDITURE
SOCIAL DEVELOPMENT
SOCIAL PROGRAMS
TAX
TAX ADMINISTRATION
TAX BASE
TAX BENEFITS
TAX BRACKETS
TAX DEDUCTION
TAX EXPENDITURE
TAX EXPENDITURES
TAX LAWS
TAX LIABILITIES
TAX PAYMENTS
TAX RATE
TAX RATES
TAX REGIME
TAX RETURNS
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXABLE INCOME
TAXATION
TAXPAYERS TAX EXPENDITURES
BENCHMARKS
TAX ADMINISTRATION
FISCAL POLICIES
POLICYMAKERS
TAX EXEMPTIONS
ALLOWANCES
CREDITS
DEFERRALS
TAX DEDUCTION
CHARITABLE CONTRIBUTIONS
UNSKILLED WORKERS
GOVERNMENT BUDGETS
spellingShingle ACCOUNTING
BUDGET PROCESS
DEDUCTIONS
ECONOMIC DEVELOPMENT
ECONOMICS
EFFECTIVE TAX RATES
ENTITLEMENTS
EXPENDITURES
FEDERAL GOVERNMENT
FISCAL
FISCAL TRANSPARENCY
GOVERNMENT BUDGETS
GOVERNMENT EXPENDITURES
GOVERNMENT SPENDING
INCOME
INCOME TAX
MINISTERS
MINISTRY OF FINANCE
POLICY RESEARCH
PRESIDENCY
PRIVATE SECTOR
PRIVATE SECTOR PARTICIPATION
PRODUCERS
PROVISIONS
PUBLIC EXPENDITURE
SOCIAL DEVELOPMENT
SOCIAL PROGRAMS
TAX
TAX ADMINISTRATION
TAX BASE
TAX BENEFITS
TAX BRACKETS
TAX DEDUCTION
TAX EXPENDITURE
TAX EXPENDITURES
TAX LAWS
TAX LIABILITIES
TAX PAYMENTS
TAX RATE
TAX RATES
TAX REGIME
TAX RETURNS
TAX REVENUE
TAX REVENUES
TAX SYSTEM
TAXABLE INCOME
TAXATION
TAXPAYERS TAX EXPENDITURES
BENCHMARKS
TAX ADMINISTRATION
FISCAL POLICIES
POLICYMAKERS
TAX EXEMPTIONS
ALLOWANCES
CREDITS
DEFERRALS
TAX DEDUCTION
CHARITABLE CONTRIBUTIONS
UNSKILLED WORKERS
GOVERNMENT BUDGETS
Swift, Zhicheng Li
Cavalcanti, Carlos B.
Why Worry About Tax Expenditure?
relation PREM Notes; No. 77
description Tax expenditures are concessions that fall outside tax norms or benchmarks. These norms include accounting conventions, the structure of tax rates, the deductibility of compulsory payments, provisions to facilitate tax administration, and norms related to international fiscal obligations. Tax expenditures are deviations from these norms, implemented to encourage behavior deemed desirable by policymakers, and can take a number of forms-including tax exemptions, allowances, credits, deferrals, and relief (see OECD 1996). The classic example is a tax deduction for charitable contributions, where the reduction in tax revenue is more than offset by the increase in support for charitable activities. Tax expenditures are not a free lunch, however. They can lead to inefficiencies and inequities, stimulating no additional activity and making the tax regime more regressive. For instance, a tax concession granted to employers who hire unskilled workers might go to employers who would have hired such workers anyway. Tax expenditures also affect government budgets, because they imply forgoing revenue that could be used to fund direct government expenditures.
format Publications & Research :: Brief
author Swift, Zhicheng Li
Cavalcanti, Carlos B.
author_facet Swift, Zhicheng Li
Cavalcanti, Carlos B.
author_sort Swift, Zhicheng Li
title Why Worry About Tax Expenditure?
title_short Why Worry About Tax Expenditure?
title_full Why Worry About Tax Expenditure?
title_fullStr Why Worry About Tax Expenditure?
title_full_unstemmed Why Worry About Tax Expenditure?
title_sort why worry about tax expenditure?
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2003/01/2518855/worry-tax-expenditure
http://hdl.handle.net/10986/11327
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