What are tax expenditures? How do tax expenditures affect taxpayers?

Vickie Clampett: not all expenses are tax deductible. not even for businesses. for individuals tax expenditures are called "itemized deductions" for businesses all expenses are tax deductible expect M-1's and non income statement items.

Ulysses Failey: The US doesn't usually give direct subsidies to companies (except recently), so it gives out tax credits. Tax expenditures are tax dollars we give up through granting preferences such as tax credits. Tax expenditures affect taxpayers in the same way as any public spending does. You are either paying taxes to pay for them, or if you are lucky, you are receiving them.

Inez Relihan: Tax expenditures are losses to the U.S. treasury from granting certain deductions, exemptions, or credits to specific categories of taxpayers. Tax breaks are one method Congress uses to promote certain policy objectives. For example, deductions for mortgages encourage home ownership, while credits for childcare expenses allow single ! parents to work. Capital gains reductions allow companies to build new factories.Tax expenditures are an alternative to direct government spending on policy programs like universal health care, social security, and welfare....Show more