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normative structure against which the apartments should be evaluated had no consent in the past and nowadays registers an evolution toward different forms of tax system design.

b) Ladd is right while suggesting that under the political perspective, the tax system can be considered the result or balance of the political process (Nash equilibrium). It is probable that many articles of the tax law on tax expenditure will stay in spite of their popularization, because there are few incentives for the elimination. Many tax expenditures benefit to middle class sectors, with vote power or representing the medium voter's preferences.

c) The substitution of tax expenditures by programs of direct spending would affect different political actors inside the government bureaucracy. The modifications imply redistributions of power among policy makers belonging to different committees, ministries or government bodies.

d) Under certain circumstances tax expenditure can be a more effective policy to achieve the pursued objective than a program of direct spending. It can be less costly from the angle of the bureaucracy required to operate the program.

e) Ladd also cited King (1984), who suggested that tax expenditure is a good trade off among liberals or democrats (Democratic Party) and conservatives (Republican Party); the first one wanting government “to make something” and the second wanting “markets solving things” and therefore “public spending be small”.

4) The concept of tax expenditure as a tool of budget control for the definition of alternative fiscal policies

An argument in favor of the concept “tax expenditure” has been the advantage that a government have when it can face not only explicit options of direct spending but also of tax expenditure solutions when having to decide a budget reduction due to the deficit. However, modifications in tax laws are usually more difficult than those of expenditures. The first ones demand the inevitably participation of the Congress; the seconds can be decided at the executive's level. In USA special majorities (2/3 of votes) are also required to reduce exemptions or tax expenditures, as long as direct spending is solved by simple majority.

5) Some concluding remarks on the issue

From the previous analysis it is possible to conclude that tax expenditure concept is a useful tool for governments and constituency to understand policy alternatives in fiscal politics. It improves transparency and makes more effective the civic control of government actions. But it is not exempt of problems. In synthesis, it is interesting advance the following questions to be answered:

  • 1)

    Can or should tax policy be separated from spending policy?

  • 2)

    Which is the tax policy objective, to collect revenues and be neutral (the “strictly fiscal

aim”) or must fulfill others policy's objectives? 3) Is it possible to define the optimum or the good tax system (the baseline system or benchmark) or are there different opinions to make such definition? 4) Which is the list of government institutions that should participate in the discussion and definition of the tax structure and in which way the technique of budget accounting could help and at the same time could affect the use of the concept tax expenditure?

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