Tax Breaks Cost More Than Discretionary Spending In 2015

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Congress spent more on tax breaks than on discretionary spending in 2015, according to a blog post by the Government Accountability Office (GAO).

Tax expenditures — incentives meant to prompt or discourage particular actions by individuals, families, foundations or businesses — cost $1.2 trillion in 2015, compared with $1.1 trillion for discretionary spending.

The incentives can include credits against taxes owed, deductions, shelters, exclusions, exemptions, deferrals and preferential rates.


Spending through the tax code isn’t as well-known as other types of federal expenditures, such as for defense and national security, Social Security, Medicare or welfare spending, but tax incentives have the same net effect on the budget, GAO said.

Tax incentives in 2015 “didn’t have the scrutiny of other types of federal spending,” GAO said in its Watchblog. Tax breaks, unlike government programs in a budget, often have few to no performance measures, GAO added. (RELATED: Feds Stumped By 158 Tax Expenditures Worth $1.2 Trillion)

GAO said agencies should periodically review tax expenditures to see if they should continue, compare tax expenditures to spending programs with similar goals and include tax expenditures in annual performance management reviews and budget presentations.

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