The fiscal cliff debate culminated in the passage of the American Taxpayer Relief Act of 2012 (ATRA). ATRA makes permanent most of the tax cuts enacted in 2001 and 2003, permanently patches the alternative minimum tax, extends for five years the enhancements to individual income tax credits...
Recent economic research has improved our understanding of who bears the burden of the corporate income tax. One key finding is that returns to corporate capital are substantially "supernormal," returns in excess of the "normal" riskless return to waiting. The other key result is that...
Some political leaders have proposed to lower individual income tax rates and make up the lost revenue by eliminating tax preferences. To help inform the discussion of such proposals, we examine illustrative revenue-neutral combinations of lower rates and cuts in tax preferences and their...
The statutory rate structure of the federal individual income tax the number and width of brackets and the level of rates has changed significantly over time, as has the distribution of taxpayers across rates. This article examines how the top statutory marginal tax rate changed at various...
This paper analyzes three options to increase individual income tax rates to reduce the projected debt-to-GDP to 60% by 2020, 2025 or 2035. Option 1 increases all individual income tax rates, Option 2 increases only the top three rates, and Option 3 only the top two rates. Options are analyzed...
A value added tax (VAT) with a broad base and a VAT that excludes food, housing, and medical care would both impose larger burdens as a share of income on low-income than on high-income taxpayers. A rebate aimed at low-income taxpayers would reduce their VAT burden more than exclusions of...
In "100 Million Unnecessary Returns," Columbia University law professor Michael J. Graetz proposed a sweeping reform of the federal tax system that is intended to simplify the tax system, improve economic incentives, and maintain fairness. The Graetz proposal would remove most current taxpayers...
Two ways of reducing the deficit are imposing a broad VAT with a rebate to offset the burden on low-income households and increasing marginal income tax rates. The prototype VAT would impose a larger burden on low- and middle-income households than raising income tax rates and increase...
The federal individual income tax has had many more brackets and much higher rates in the past than it does today. In 1958, for example, there were 24 brackets (versus 6 today) and the top rate was 91 percent (versus 35 percent today). The impact of more brackets and higher rates on taxpayers...
Republicans and some leading economists have raised concerns about the cost, fairness, and stimulative effects of proposed cash payments in the pandemic relief legislation Congress...
Some Senate Republicans say they want to scale back President Biden’s proposed $1,400 relief payments. Last week, my Tax Policy Center colleague Howard Gleckman proposed...
