Working Paper: NBER ID: w14263
Authors: Rosanne Altshuler; Robert D. Dietz
Abstract: We examine the measurement of tax expenditures, as well as review issues concerning the classification of tax expenditures generally. We use calculations from NBER's TAXSIM to illustrate some of the problems with the current methodology for estimating tax expenditures. Unlike most previous work on the topic, we focus on how features of the current tax system including the alternative minimum tax and sunset rules complicate and compromise the value of information provided by the tax expenditure budget.
Keywords: No keywords provided
JEL Codes: H20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Presence of AMT (Y20) | Reduced value of tax expenditure estimates (H29) |
| Changes in effective marginal tax rates (H31) | Altered estimated tax expenditures for deductions (H29) |
| Without AMT (Y20) | Tax expenditures for state and local income tax deduction would have increased significantly (H79) |
| Without AMT (Y20) | Higher value of mortgage interest deduction (G51) |
| Presence of AMT (Y20) | Lower estimated tax expenditure for mortgage interest deduction (H29) |