The Lifespan of a Tax Break: Comparing the Durability of Tax Expenditures and Spending Programs

Scholars have recently begun to recognize the importance of policy durability to the overall shape of public policy. Existing work on policy durability focuses on the political environment rather than elements of policy design, such as the delivery of benefits as a tax break instead of a direct outlay. I argue that the unique characteristics of tax breaks, including the relatively narrow reach of these policies, make them vulnerable to elimination. Using a newly expanded data set, I test this claim by examining the longevity of all federal tax and non-tax programs created between 1974 and 2003, and find that tax expenditures are more vulnerable to elimination than non-tax programs. Further analysis provides more support for my arguments, as narrowly targeted tax expenditures prove more vulnerable than those benefiting the public. This project makes an original contribution to the literatures on policy durability, indirect governance, tax policy, and policy feedback.