Law Commons^™

Responding To Covid: How To Deal With Nearly $100 Billion In Wasted Incentives, Richard Pomp

Faculty Articles and Papers

This article urges policymakers to cut down on ineffective and costly tax expenditures. Tax expenditures aim to incentivize beneficial economic outcomes; the tax jurisdiction surrenders the right to a portion of its tax base in anticipation of economic benefits. While tax expenditures are not inherently bad or good, many believe that most tax incentive programs would fail a cost-benefit analysis.

Ideally, tax incentives target economic activity that would not occur in the absence of the incentive. And to be considered a success, the benefit of the activity must outweigh the cost of the incentive. For example, if the goal of …