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> For this reason, organizations like the Congressional Budget Office treat tax breaks and government spending as essentially equivalent. This seems weird. Col
by acbabis 10y ago
> For this reason, organizations like the Congressional Budget Office treat tax breaks and government spending as essentially equivalent.
This seems weird. Collecting and spending money has overhead and externalities (enforcement for example), while not taxing in the first place does not.
- dak1 10y agoThere's definitely an overhead to tax breaks. There's a difference between simplifying the tax code, which would theoretically reduce overhead, and providing an itemized tax break, which actually increases complexity (and yes, there's enforcement of that tax break too). Treating a tax break like government spending seems completely rational.
- acbabis 10y agoNow that I think about it a little more, this seems like a red herring. Just because the budgeting office says two numbers are the same on paper, doesn't mean anything about the efficacy of the policy, for or against.
- deleted 10y ago[deleted]
- boxy310 10y ago"Not taxing" also includes overhead for ensuring that people aren't abusing the deduction or exemption, or the societal/political costs involved in the perception that select few get a free pass (i.e. overshore tax shelters).
- guyzero 10y agoThose externalities are already being paid.
- hx87 10y agoEven if a tax break is simply lowering a marginal rate (which it rarely is), it's not like enforcing a 36% tax is less costly than enforcing a 40% one.