Tax Expenditure Report Checklist
To achieve its goals of improving transparency, encouraging accountability, and saving money, a tax expenditure report should have the features listed below.
Accessibility. The report should be:
- Published regularly.
- Incorporated into the budget process.
- Available on the Web.
Scope. The report should include:
- Tax expenditures related to all taxes.
- All tax expenditures, including those with lower costs or those benefiting few taxpayers.
- Explicit and implicit tax expenditures.
- Tax expenditures enacted by the state that affect local government.
Detail. The report should include:
- The cost of the tax expenditure, using current data.
- The cost in future years, to allow comparison with other proposed expenditures.
- A description of the tax expenditure.
- The relevant legal citation and year of enactment.
- Detail on the taxpayers who benefit from the tax expenditure.
- Separate reporting for the state and local revenue losses, where applicable.
Analysis. The report should:
- Classify tax expenditures using the same categories as direct spending.
- State the purpose of each tax expenditure.
- Evaluate the extent to which that purpose has been accomplished.
- Analyze the distribution of benefits by income level and size of business.
Data Source: Center for Budget & Policy Priorities