Saturday, September 04, 2010
Expiring Tax Provisions 2009-2020 - Prepare to Pay
The Congressional Joint Committee on Taxation has a list of expiring tax provisions from 2009 through 2020 available for download in PDF format here. A lot of the expiring provisions are tax credits, e.g., the credit for purchasing an qualified alternative fuel vehicle. I actually think that's a good thing because offering credits for buying something that someone might not choose to buy absent the credit, or might have bought anyway without it but just changed the timng of the purchase to take advatage of it. This just introduces distortions into the market in the name of producing some social outcome of dubious benefit.
A prime example was last year's Cash for Clunkers program which did nothing more than pull forward the purchases of cars that were going to be purchased anyway at a cost of billions of taxpayer dollars and had the perverse side-effect of taking a portion of the supply of affordable used cars out of the market, making what was left more expensive. And what market demographic buys used cars? Yup, lower income people. Cash for Clunkers subsidized relatively more affluent people to buy cars they would have bought anyway at the expense of the poor and of the taxpayers and was incompetently administered to boot [Ed.; Well what did you expect? It is a government program after all.].
Anyway, all that being said, almost all the expiring tax provisions will result in higher taxes for nearly everyone. To paraphrase a certain barbarian; what will be left in your wallet?