How did the Tax Cuts and Jobs Act affect tax expenditures? Q.How did the Tax Cuts and Jobs Act affect tax expenditures? A.The TCJA reduced some tax expenditure provisions, eliminated others, and introduced and expanded still others. In addition to these direct changes in tax expenditure provisions, an increase in the standard deduction and lower individual and corporate tax rates reduced the number of taxpayers using tax expenditure provisions and the value of the tax benefits they receive. Read more about How did the Tax Cuts and Jobs Act affect tax expenditures?
Why are tax expenditures controversial? Q.Why are tax expenditures controversial? A.To some, tax expenditures are spending items that do not belong in the tax code. To others, they are merely a way of reducing taxes, and repealing them would amount to a tax increase. Read more about Why are tax expenditures controversial?
How will tax expenditures evolve over the coming decade? Q.How will tax expenditures evolve over the coming decade? A.Tax expenditures will decline as a share of GDP through 2024, as temporary provisions of the 2021 American Rescue Plan Act expire, and then will increase after 2026 as most individual income tax provisions in the 2017 Tax Cuts and Jobs Act expire. Throughout the decade, tax expenditures as a share of GDP will remain about the same, but itemized deductions will increase while refundable tax credits will decline. Read more about How will tax expenditures evolve over the coming decade?