Yet, structured as a tax expenditure, it is unlikely that policy makers would be aware of this. If the program was structured as a direct spending program it is more likely that its effectiveness would be subject to careful review. And it would be more likely to be structured in a way that would target state dollars to where they are most needed. Government agencies with expertise in the area covered by a tax expenditure are typically not involved in their administration. Thus, the agency does not routinely assess whether the tax expenditure is the best way to achieve the agency's policy objectives.
Tax expenditures complicate the tax system.
The complications go beyond the initial form-filing. Taxpayers, businesses particularly, often restructure their affairs and relationships with other businesses to take advantage of lucrative tax expenditures. Corporations and individuals sometimes go to great lengths to take advantage of tax expenditures. For example, those who have more tax expenditures than they can use in a year enter into transactions to transfer their tax benefits to those who can make use of them. The most commonly cited example of this is the trading of the benefits of accelerate depreciation and other investment incentives through leasing deals.