What are tax expenses?
Tax expenses are government expenditure programs that use the Tax Act instead of direct expenditure. They exist in the form of returnable credits, tax discounts, deductions and preferential tax rates. Tax expenses are somewhat controversial in terms of policy; Some politicians are considering this definition by reference to tax expenses as tax cuts if they are in fact in the form of indirect government expenditure.
A large point of many national government budgets can be used to finance various programs intended to help taxpayers. Credits for the purchase of new houses and cars and the implementation of renewable energy can help govern the economy and the green industry by repaying taxpayers. Drainable for tuition and college for university help people afford college and maintain their homes.
Tax expenses are sometimes cited as more effective in influencing taxpayers' behavior than direct expenses. For exampleEven solar panels could reduce the check for any person who promised to buy solar panels for a house or company. Unfortunately, it would undoubtedly cause problems, because at that time the government department would have to check that the person actually bought panels after the money was issued. By using the Tax Code to create expenditure, the government could encourage the use of a solar panel by offering credit for panels purchased in the previous year and being able to ask for simple documentation such as confirmation to prove the purchase.
According to some studies, the largest source of tax expenses in the United States is the exclusion of employer's contributions to employees' health care. These expenses allow employees to reduce their total income, which can help reduce their taxes. Employers are also sometimes allowed to record these expenditures as a necessary business expenditure. In 2008 stThe tax expenditure of approximately $ 131 billion in the US (USD).
The controversial nature of tax expenditure tends to revolve around the use and abuse of concept in politics. Expenditure is sometimes framed as the opposite to direct expenditures, although they are actually another means of the same end. If the Government has a choice between a loss of $ 1,000 in income by crediting solar panels or by each person who uses solar panels of $ 1,000, in any case the amount spent remains the same. Unfortunately, some political analysts suggest that expenditures can be easier to frame as tax cuts that voters can more likely resonate than to increase government expenditure.