This Article demonstrates that tax expenditures are procyclical, exacerbating the business cycle. Tax expenditures amplify the impacts certain activities, such as charitable giving or home purchases. Because these activities vary with the business cycle (e.g., people give more charity in boom times than in busts), the implicit government spending associated with tax expenditures are higher at business cycle peaks than at business cycle troughs. The more a given activity varies with the business cycle, the greater the procyclicality of the tax expenditure. This procyclicality contrasts with ordinary government spending and revenue generation, which are often praised for countercyclicality. As business cycle stabilization assumes an increasingly important role in government tax and spending policy, the desirability of tax expenditures goes down. By contrast, income based phase-outs of tax expenditures are countercyclical. The net cyclical effect of an expenditure combined with a phase-out therefore depends on whether cyclical changes in the activity subject to the expenditure occur primarily in the phase-out range or below the phase-out range.