It's understandable why Congress has grown so attached to tax expenditures. It's a way to spend without blame. In fact, Congress is more likely to take credit for reducing taxes.A tax expenditure program is government spending through the tax code. Tax expenditures alter the horizontal and vertical equity of the basic tax system by allowing exemptions, deductions, or credits to select groups or specific activities. For example, two people who earn exactly the same income can have different effective tax rates if one of the tax payers qualifies for certain tax expenditure programs by owning a home, having children, and receiving employer health care and pension insurance.
That's Washington. How about Richardson?
Dunno. The City of Richardson just held a public hearing on the proposed 2013-2014 budget, including a 32 page presentation that never mentions tax expenditures. Yet we know they exist. Here, for example, is a recent article from The Dallas Morning News that provides details about just one:
Now, I admit that I don't pay close enough attention to the weekly council meetings to claim to know for sure everything that's discussed. And I don't pore over the hundreds of pages in the budget documents closely enough to claim to be an expert about what's in them and what isn't. If someone can tell me where that $100,000/year "sales-tax rebate" shows up in the budget, I'd appreciate it. Same for that $300,000/year "grant."The Richardson Alamo Drafthouse has signed a 15-year lease to occupy 30,000 square feet on the site of a former Pep Boys. The new theater, with seven screens and 825 seats, was built from the ground up, Bill C. said.
To help out, the city approved a sales-tax rebate for Alamo that is good for up to $100,000 per year for 10 years, and an annual $300,000 grant for five years for property owner Hartman Richardson Heights.
"The city incentives came to the landlord, lowering the overall project cost and thus gave me lower rent," said Bill C. "This gives me less overhead and thus our break-even is a much lower revenue number than the average revenue numbers our Austin-based stores do each year."
The city backed the deal, anticipating the theater would become a regional retail draw, a catalyst for redevelopment, and offer "quality nighttime entertainment, and strong branding to attract the city' younger demographic."
Source: The Dallas Morning News.
To this untrained eye, it looks like Richardson's council is busy doling out tax expenditures (that is, spending by another name) without ever showing enough transparency about it to discuss it in public. I don't see any way for the public to know just how much all these deals add up to. Does anyone on the council even know?
At least at the federal level, someone tries to keep track of all this spending:
$1 trillion. That's a lot by any measure. Is there an equivalent of the JCT at the local level? Does someone, anyone, at city hall know what the total tax expenditures are for city government? If not, does that bother anyone?The Congressional Joint Committee on Taxation (hereafter JCT) annually estimates tax expenditures in terms of revenues lost to the U.S. Treasury for each special tax provision included in the U.S. tax code. In 2009, the JCT listed over 180 tax expenditure programs that cost the U.S. government over $1 trillion in revenues.