Federal agencies can’t identify 158 tax expenditures worth a whopping $1.20 trillion in forgone revenue for Fiscal Year 2015, according to a recent report released by the Government Accountability Office.
The findings show the Office of Management and Budget nor the federal agencies have made significant strides to show how the expenditures’ are being utilized toward agency goals.
The nonpartisan government watchdog said while discretionary and mandatory spending programs receive an annual overview while the president is compiling information for his budget, tax expenditures lack the same amount of oversight as those that are not expiring are not subject to annual congressional budget processes.
The report said revenue losses from tax expenditures has reached levels comparable to discretionary spending. While discretionary spending has gone down since 2010, tax expenditures have continued to skyrocket.
GAO report
The report found the lack of oversight could have a direct effect on the American taxpayer.
“The revenue the federal government forgoes from tax expenditures reduces the tax base and requires higher tax rates to raise any given amount of revenue,” it reads. “In addition, tax expenditures, like any federal program spending, reduce the amount of funding available for other federal activities, increase the budget deficit, or reduce any budget surplus.”
The GAO said to alleviate the problem, the secretary of the Treasury needs to work more closely to agencies to identify how the funds are being spent.
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