Stanley Surrey's Lasting Influence

Stanley Surrey is perhaps best known for his promotion of the concept of tax expenditures - the characterization of various tax preferences as substitutes for direct expenditures. That emphasis understates his lasting influence on the tax policy process. An equally important and lasting achievement was establishing and promoting the integrity and professionalism of the Treasury’s Office of Tax Policy (OTP), while garnering support of much of the wider tax policy community for basing tax policy on the principles of fairness, simplicity, and efficiency. In this article, we focus mainly on historical developments in the concept and use of tax expenditures both in the United States and abroad. We provide special attention to the significant role played by tax expenditures in the movement that led to the Tax Reform Act of 1986, which is the type of effort that Surrey championed. We relate tax expenditures to other base-defining measures such as economic income, consumption, and ability to pay in both development of that Act and within the continuing tax policy debate