This article illustrates the differences between the two types of tax expenditures by examining the child tax credit (a distributional expenditure), the charitable deduction (an allocative expenditure), and taxfree saving accounts and the mortgage deduction (both of which are-usually defended on allocative grounds but probably have mainly distributional impacts). These differences should be well understood by policymakers as they consider tax expenditure reform as part of a deficit reduction plan.
Gregg D, Polsky,
Rationally Cutting Tax Expenditures
, 50 U. Louisville L. Rev. 643
Available at: https://digitalcommons.law.uga.edu/fac_artchop/1100