Cover IMF Working Papers
Some Microeconomics of Fiscal Deficit Reductions: The Case of Tax Expenditures
Author: International Monetary Fund
Series:
IMF Working Papers
Volume/Issue:
Volume 1989: Issue 014
Language:
English
Publication Date:
01 Jan 1989
DOI:
https://doi.org/10.5089/9781451924053.001
ISBN:
9781451924053
ISSN:
1018-5941
Pages:
31
Keywords:
WP; tax expenditure; tax system; adjusted gross income; tax rate; personal income; Tax expenditures; Personal income; Income tax systems; Property tax
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper considers the merits of reducing or eliminating some specific tax expenditure measures currently in force in the United States with a view to reducing the federal fiscal deficit. The paper starts from the observation that savings decisions in the United States are distorted and that therefore government borrowing to finance current expenditures results in significant welfare losses. It is possible by reducing or eliminating individual tax expenditures to reduce the fiscal deficit while at the same time enhancing economic efficiency. However, tax expenditures are heterogeneous so changes to the range of tax expenditures should be selective.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund