Tax expenditure

Surrey created the term to characterize the political use of tax breaks to enact social policies that would ordinarily be accomplished through direct expenditures.

"[3] As of fiscal year 2020, the United States Treasury lists over 160 tax expenditures,[4] the majority for private social benefits and services like employee-provided healthcare.

[6] The Congressional Budget Office (CBO) estimated that U.S. tax expenditures in fiscal year 2019 totaled $1.6 trillion (7.8% of gross domestic product).

[8] The CBO has also estimated the size of major tax expenditures on federal receipts as an annual average percent of GDP, for the period of 2016 to 2026.

[3] This study also found that Republicans are more likely to increase tax expenditures when in control of government thereby subsidizing the activities of businesses and the wealthy.

[13] Ellis and Faricy (2011) find that when tax expenditures rise, public opinion adjusts and becomes more liberal to counteract the conservative policies.