“It’s another of your Orwellianisms,” she said.
I went on a hunt. Sure enough. I found the matter explained on Deliberately Considered (link). Here is the relevant paragraph:
Are tax expenditures an entirely different matter? The Congressional Budget Act of 1974 (Public Law 93-344) defines tax expenditures as, “…revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of liability.” That is, in plain English: tax expenditures are lost tax revenues caused by special exceptions to tax laws. By law, a list of “tax expenditures” must be included in the President’s budget in a section titled “Analytical Perspectives,” prepared by the Office of Management and Budget. The list for 2012 includes 173 “tax expenditures (p 241 – 251),” which total over one trillion dollars for the fiscal year beginning October 1, 2011. As objective as this may sound, the list and estimates of “cost” is actually quite subjective, because analysts posit the starting point of the tax baseline.Congress was dominated by the Democrats (both houses) in that year. The motivation behind this phrasing could, presumably, be pinned down sharply with lots of research. But never mind that. Here is a simple case of using a word to mean roughly the exact opposite of what it has traditionally meant.
You cannot expend, meaning spend, money you don’t actually have. To view as expenditures money that you have not collected—and have not collected because laws in place prevent you from collecting them—that is not a tax expenditures.
Behind this lies some kind of really strange logic, certainly intended in some ways to confuse. That is the issue, always, when the meaning of words is arbitrarily changed by those with authority enough to make the concept stick more or less.