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Research report

How Big is the Federal Government?

Donald Marron, Eric Toder
March 26, 2012
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Abstract

The federal government is larger than conventional budget measures suggest. Many tax preferences are effectively spending programs. Adding these preferences to federal outlays and receipts makes the government appear about 4 percent of GDP larger. The 1986 tax reform cut these benefits, but they have since rebounded to a larger share of GDP than before. Using this broader measure of government size, many base-broadening reforms viewed as tax increases would be reclassified as spending cuts. Raising marginal tax rates would be recorded as a tax increase and a spending increase because it would boost the value of many tax preferences.

Research Area

Individual Taxes Federal Budget and Economy
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Meet the Experts

  • Donald Marron
    Institute Fellow
  • Eric Toder
    Institute Fellow and Codirector, Tax Policy Center
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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