Tax benefits (or "tax expenditures") are important, broadly applicable and potentially efficient instruments for creating incentives for private activities and for promoting numerous policy objectives (for example in transport policy, housing policy, environmental policy and many sectoral or horizontal areas of economic policy). At the same time, because they are not included in government budgets, have a tendency towards longevity and are susceptible to deadweight effects, tax benefits must be monitored with particular vigilance as part of a results-oriented and evidence-based governance process. To obtain a scientific basis for conducting this governance task, the Federal Ministry of Finance commissioned a large-scale evaluation of 33 German tax benefits. Conducted jointly by researchers at the FiFo Institute for Public, the Leibniz Centre for European Economic Research (ZEW), the Ifo Institute, and the Fraunhofer Institute for Applied Information Technology (FIT), the study uses a standardized framework to evaluate tax subsidies that add up to a total of roughly € 7.4 billion.
Gerhards, Eva, Michael Thöne and Sven Stöwhase (2019), Evaluierung von Steuervergünstigungen II - Teilbericht D, Evaluierungsgruppe D: Einkommensteuer - Wohnungswesen und Städtebau, Bundesministerium der Finanzen (BMF), Berlin