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Publications By Author

Author: Rohaly, Jeff

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Why Individual Income Tax Revenues Grow Faster Than GDP (Research Brief)
Jim NunnsJeff Rohaly

Using the latest long-term budget projections from the Congressional Budget Office, we project that individual income tax revenues under current law will increase as a share of GDP from a little over 9.5 percent in 2025 to a little less than 13.3 percent in 2090, an increase of over 3.7 percentage points. This paper describes the factors that explain this differential in growth rates and provides estimates from the Tax Policy Center’s new long-run microsimulation model of the relative importance of each of these factors over the 2025-2090 period. We find that 80 percent of the increase in revenues as a share of GDP occurs because current law does not adjust some individual income tax parameters for inflation and none of the parameters for changes in real income.

Published: 09/01/15
Availability:   PDF

Preliminary Analysis of The Family Fairness and Opportunity Tax Reform Act (Research Report)
Leonard E. BurmanElaine MaagGeorgia IvsinJeff Rohaly

Senator Mike Lee's Family Fairness and Opportunity Tax Reform Act (S.1616) would significantly expand tax benefits for children, repeal the alternative minimum tax, and repeal the Affordable Care Act surtaxes on earnings and net investment income. To partially offset the cost of these provisions, the plan would consolidate filing statuses and tax brackets and repeal itemized deductions other than those for charitable contributions and home mortgage interest. TPC estimates that the plan would reduce tax revenues by $2.4 trillion over the ten-year budget period, 2014-2023, and remove roughly 12 million tax units from the federal income tax rolls in 2014.

Published: 03/04/14
Availability:   PDF

Tax Provisions in the American Taxpayer Relief Act of 2012 (ATRA) (Research Report)
Jim NunnsJeff Rohaly

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patches the alternative minimum tax, extends for five years the enhancements to individual income tax credits originally enacted in the 2009 stimulus legislation, and temporarily extends certain other tax provisions. This paper provides a detailed description of the individual, corporate, and estate tax provisions in ATRA.

Published: 01/09/13
Availability:   PDF

Options to Reform the Deduction for Home Mortgage Interest (Research Report)
Daniel BanemanHang NguyenJeff RohalyEric Toder

Currently, taxpayers can deduct interest on up to $1 million in acquisition debt used to buy, build, or improve their primary residence or a second designated residence. In addition, taxpayers can deduct interest on up to $100,000 in home equity loans or other loans secured by their properties regardless of the loans’ purpose. We consider a proposal that would limit the amount of deductible interest to the amount incurred on the first $500,000 of debt on a primary residence only, and would replace the itemized deduction with a nonrefundable tax credit equal to 15 percent of eligible home mortgage interest.

Published: 08/16/11
Availability:   PDF

Options to Limit the Benefit of Tax Expenditures for High-Income Households  (Research Report)
Daniel BanemanJim NunnsJeff RohalyEric ToderRoberton Williams

This analysis measures the revenue and distributional impacts of three proposals to limit tax expenditures for higher-income households: the Obama Administration's plan to cap the value of itemized deductions at 28 percent; an effective minimum tax (EMT) to ensure that tax liability is at least a certain percentage of a taxpayer's income; and a modified version of a recent proposal to limit the value of specific tax expenditures to two percent of adjusted gross income (AGI).

Published: 08/02/11
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Why Some Tax Units Pay No Income Tax (Research Report)
Rachel M. JohnsonJim NunnsJeff RohalyEric ToderRoberton Williams

About 46 percent of American households will pay no federal individual income tax in 2011, roughly half of them because of structural features of the income tax that provide basic exemptions for subsistence level income and for dependents. The other half are nontaxable because tax expenditures— special provisions in the tax code that benefit selected taxpayers or activities—wipe out tax liabilities and, in the case of refundable credits, yield net payments from the government. Provisions that benefit senior citizens and low-income working families with children particularly affect households with income under $50,000 but other factors make higher-income households nontaxable.

Published: 07/27/11
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Catastrophic Budget Failure  (Research Report)
Leonard E. BurmanKatherine LimJeff RohalyJoseph Rosenberg

Continuation of current U.S. fiscal policy will lead to an enormous accumulation of debt with potentially disastrous economic consequences. Exacerbated by the recent economic turmoil and fueled by the willingness of creditors to lend at very low interest rates, there is signifi cant risk that necessary fi scal reform will be put off. In this paper, we consider the causes, mechanisms, and macroeconomic fallout of a catastrophic budget failure — a situation in which markets’ perception of the credit worthiness of the U.S. government rapidly deteriorates, leaving it unable to access credit markets at any reasonable rate of interest and generating a high probability of the previously unthinkable: the U.S. government defaulting on its debt obligations.

Published: 09/01/10
Availability:   PDF

The Impact of the Bipartisan Tax Fairness and Simplification Act of 2010 ("Wyden-Gregg") on Effective Marginal Tax Rates (Research Report)
Katherine LimJeff Rohaly

The Wyden-Gregg tax reform proposal would represent a broad reform of the federal income tax system. This paper examines the plan's impact on individuals' effective marginal tax rates (EMTR), the incremental amount of tax owed on an additional dollar of income. We examine the impact on the EMTR for both wage income and realized capital gains against current law and current policy baselines. We find the Wyden-Gregg plan would lower the overall average EMTR on wages relative to both current law and current policy, but would raise the overall average EMTR on gains when compared with those same two baselines.

Published: 07/14/10
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Preliminary Revenue Estimates and Distributional Analysis of the Tax Provisions in the Bipartisan Tax Fairness and Simplification Act of 2010 (Research Report)
Jim NunnsJeff Rohaly

The Bipartisan Tax Fairness and Simplification Act of 2010 ("Wyden-Gregg," introduced as S. 3018) is a broad reform of the federal income tax system. Some provisions would also expand the Social Security payroll tax base. This paper presents the Tax Policy Center's estimates of the revenue and distributional effects of the income and payroll tax provisions in Wyden-Gregg.

Published: 05/24/10
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Variation in Effective Tax Rates (Article/Tax Facts)
Katherine LimJeff Rohaly

The expansion of refundable tax credits and the proliferation of specialized tax breaks means that households with similar incomes can face wildly different effective federal tax rates. For example, among middle-income households, the median effective income tax rate is 3 percent, but 10 percent of those households face effective rates exceeding 9 percent and another 10 percent receive a net government subsidy greater than 4 percent of their cash income.

Published: 02/22/10
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