Tax Expenditure Analysis

Tax expenditure analysis evaluates how government tax policies—like deductions, credits, or exclusions—affect revenue and serve policy goals. Essentially, these are ways the tax system is used to encourage or support certain activities, such as homeownership or education, by reducing tax payments. This analysis helps policymakers understand the cost of these incentives compared to direct government spending and assess their effectiveness. It provides insight into how tax policies influence economic behavior and government revenue, enabling more informed decisions about public priorities and fiscal management.