Which of the following is an example of a tax expenditure of the federal government?
A) mortgage interest tax deduction
B) loan programs
C) free programs
D) off-budget entries

Question

Quizplus · Accepted Answer

A tax expenditure is a provision in the tax code that reduces the tax liability of certain groups or activities. The mortgage interest tax deduction allows taxpayers to deduct the interest paid on their mortgages, reducing their taxable income and reducing the Treasury's revenue. This is an example of a tax expenditure. Loan programs and free programs are not tax expenditures, as they do not involve tax breaks or reductions. Off-budget entries are not tax expenditures either, as they refer to items excluded from the formal federal budget.

Which of the Following Is an Example of a Tax