The Hidden Cost of Tax Expenditures

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Oct 20, 2026 · 11m · transcript

Most Americans think of the federal budget as a ledger of spending checks written by the government. But there is a massive, often invisible second ledger: tax expenditures. These are the provisions in the tax code that reduce revenue—think mortgage interest deductions, capital gains preferences, or health insurance exclusions—that function exactly like direct spending but bypass the usual appropriations process. In this episode, we dig into how these hidden subsidies skew public finance priorities, distort market behavior, and create structural deficits that traditional deficit hawks often…