Tax Expenditures: Revenue Loss Versus Outlay Equivalents

Tax expenditures refer to the revenue losses attributable to provisions of the federal tax laws that deviate from a "normal" tax on income. Although there are debates over precisely what a tax expenditure is, many exclusions, deductions, credits, preferential rates, and deferrals of tax liability--other then those necessary to calculate income correctly or to provide a basic exemption from taxation--are considered tax expenditures.