Federal tax policy could affect employment policy through the following four provisions: the Targeted Jobs Tax Credit (TJTC), employment incentives in enterprise zone legislation, individual training accounts (ITAs), and employer reimbursement of employee educational expenses. The TJTC and enterprise zone proposals are both attempts to cause certain persons or target groups to achieve more employment than they would in the absence of the program. Because the plans are unlikely to create many new jobs for the economy as a whole, gains by the target populations will be roughly equaled by losses of other groups; however, the losers will never be able to identify themselves. The ITA approach, on the other hand, could take many forms, some of which would be heavily dependent upon employer funding and some of which would be similar to the Individual Retirement Account (IRA) program. Comparable objectives could also be achieved with a direct expenditure, such as government-run training programs or vouchers for persons identified as displaced workers. Because the enterprise zone, TJTC, and ITA proposals all involve using the tax system to achieve objectives that could also be achieved through direct public expenditure, the nation pays a price for all three programs in the equity, simplicity, and enforceability of its taxes for tax expenditures. In addition, the special benefits that these three proposals extend to special groups distort the tax system relative to more neutral forms of taxes. (MN)