A Modest Proposal to Reform Tax Expenditures

Del. David  Englin, D-Alexandria, has submitted a bill that would require any new legislation establishing or increasing tax loopholes (credits, exemptions, deductions, etc.) to expire within five years.

Tax expenditures, as I have long argued, are out of control at both the federal and state level. Englin’s bill represents a modest step to reining in this monster. The delegate clearly understands the issues at stake, and I wish only that he had gone further.

Tax expenditures, he writes in today’s Times-Dispatch, deprive the state of $12.5 billion in annual revenue (2008 figures). Eliminating the loopholes would free up resources to reduce tax rates (my preference) or boost spending in critical areas. A majority of the tax expenditures run on auto-pilot with little or no legislative oversight.

Englin has personally resolved not to vote for a tax preference unless it includes a sunset date and “a requirement that the Department of Taxation report the intent of the policy and how much revenue it cost” — information legislators need in order to weigh costs and benefits. He should make that second requirement the subject of a second bill, and he should apply it to all tax preferences, not just new ones.


Share this article


(comments below)


(comments below)


2 responses to “A Modest Proposal to Reform Tax Expenditures”

  1. The concept is not bad. I worry it’s just another hunt for more tax dollars to spend. See the following. http://www.barbarafavola.org/news-events/virginia-progressive-caucus-releases-2012-agenda
    But at least our Democrats have not blamed Bush for the need for more money as Maryland’s Governor O’Malley has in his call for higher taxes to fund union pensions. Give me Sharon Bulova anyday of the week over some of Maryland’s crazies.

  2. ferreting out tax breaks and loopholes in an effort to free up enough money to fund the State or Fed budget – is a fool’s errand – at least if anyone thinks major wholesale reforms are going to result.

    it’s going to be one at a time.. a pitched battle to claw them back …and I’m not at all convinced that our esteemed elected are up to the task.

Leave a Reply