Which of the following statements concerning tax preferences is true?
A) The annual revenue loss from federal tax preferences is quantified in the Tax Expenditures Budget.
B) Tax preferences increase the fairness of the tax law.
C) Tax preferences simplify the tax law.
D) Tax preferences make the tax law more neutral across taxpayers.

Question

Quizplus · Accepted Answer

Tax preferences refer to provisions within tax laws that allow certain individuals or groups to reduce their tax liability through deductions, exemptions, or credits. These preferences are included in the Tax Expenditures Budget, which estimates the revenue loss to the government from these provisions. Therefore, statement A is true. Statements B, C, and D are incorrect, as tax preferences can often increase complexity and reduce neutrality in the tax law.

Which of the Following Statements Concerning Tax Preferences Is True