The Administration of Tax Expenditures: The Case of the Earned Income Tax Credit

Jonathan P. Schneller, Law Clerk to Judge Stephen Reinhardt

Abstract

This paper argues that in light of tax expenditures' political popularity and consistent growth, tax expenditure analysis should shift its ambitions from the elimination of tax expenditures to their reform. One particularly promising avenue for reform is administrative, as the tax system provides a poor platform for the administration of complex programs with policy objectives unrelated to revenue collection. This paper argues that scholars and policymakers should borrow "hybrid" administrative practices from non-tax programs and apply them to tax expenditures as necessary to advance a given tax expenditure's non-tax policy objectives. It explores this idea via an in-depth case study of the Earned Income Tax Credit.