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Publications by Topic
Topic: 2001 Tax Cut
Back from the Grave: Revenue and Distributional Effects of Reforming the Federal Estate Tax (Research Report)
Author(s):
Leonard E. Burman , Katherine Lim , Jeff Rohaly
In this paper we review the current wealth transfer tax rules and the changes introduced in 2001. We offer an overview of the methodology underlying the TPC's estate tax model and then use the model to estimate the number of estate tax filers, taxable returns, and the distribution of burden under current law. Finally, we investigate the revenue and distributional effects of several proposals to reform the estate tax, including those put forth by the presidential candidates.
Published: 10/20/08
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Distribution of the 2001-2006 Tax Cuts: Updated Projections, July 2008 (Research Report)
Author(s):
Greg Leiserson , Jeff Rohaly
Since 2001, Congress has passed a major tax bill almost every year. Most have reduced taxes significantly and, since they were not accompanied by spending cuts, the resulting deficits have increased the national debt. The tax cuts total almost $2.2 trillion over ten years, and that total may be vastly understated if some or all of the cuts are extended beyond their scheduled expiration date of 2010. In addition, the cuts exacerbated the growing problem of the alternative minimum tax (AMT). Barring legislative action, more than 33 million taxpayers will fall prey to the AMT in 2010.
Published: 07/22/08
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Fiscal Policy: Fully Account for the Budget, Stick to the Budget, and Work with the Other Party (Article)
Author(s):
Jason Furman
The fiscal damage to the United States over the last seven years is calculable. It is precisely $3,889,136,064,463, according to the Bush administration's Office of Management and Budget, which totaled up the budgetary cost to date of all the tax cuts and spending increases enacted over the past seven years. Of that nearly $4 trillion total, the administration estimates that 46 percent is tax cuts, 31 percent is defense and homeland-security spending, and 23 percent is everything else, including the prescription-drug benefit. This piece first appeared in Slate on April 4, 2008 as part of a 10-part series titled "Fixing It."
Published: 04/14/08
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Make the Tax Cuts Work (Commentary)
Author(s):
Leonard E. Burman
New York Times, January 23, 2008 - Since 2001, official Washington's answer to every policy question has been the same. What should we do with a big surplus? Tax cuts. How do we beat back global terrorism? Tax cuts. Increase energy independence? Rebuild New Orleans? Expand health insurance coverage? Tax cuts, tax cuts, tax cuts. Now comes another question to which taxes have long been at least part of the answer. How do we stimulate the economy to prevent or shorten a recession?
Published: 01/23/08
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The Alternative Minimum Tax: Assault on the Middle Class (Article)
Author(s):
Leonard E. Burman
In a tax code with no shortage of ironies, the alternative minimum tax (AMT) stands out. Created by Congress in 1969, it was aimed at millionaires, but relatively few millionaires pay it. It is billed as a low-rate levy, but most of its victims face higher taxes because of it. It undermines two widely lauded reforms of the income tax -- restoring both bracket creep and the marriage penalty. And though nobody favors keeping this Frankenstein alive, it will be very difficult to kill. Welcome to the tax policy twilight zone.
Published: 10/29/07
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Tax Fairness, the 2001-2006 Tax Cuts, and the AMT: Testimony before the U.S. House Committee on Ways and Means (Testimony)
Author(s):
Leonard E. Burman
In this testimony Burman discusses the issues of tax fairness, the 2001 to 2006 tax cuts, and the individual alternative minimum tax. Burman argues that while the federal tax system mitigates economic inequality, the recent tax cuts have disproportionately benefited those at the top, while also increasing the number of people potentially subject to the AMT. He concludes with a brief discussion of how to fix the AMT in a fiscally responsible manner.
Published: 09/06/07
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Reforming the Child and Dependent Care Tax Credit (Research Report)
Author(s):
Jeff Rohaly
The child and dependent care tax credit (CDCTC) is a nonrefundable tax credit designed to help offset the expenses of providing care for children under the age of 13 or disabled dependents as long as a parent or caretaker is working or searching for work. In theory, a low-income family can qualify for a maximum $2,100 credit. The credit is not refundable, however, and families with low incomes generally owe little or no income tax. Thus, the theoretical maximum rarely applies in practice. This paper examines the revenue and distributional implications of making the CDCTC fully refundable.
Published: 06/11/07
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Tax Policy at a Crossroads (slideshow) (Slideshows)
Author(s):
Leonard E. Burman
Burman outlines "action forcing events" including exploding entitlement costs, the AMT, increased economic inequality, and the expiration of the bush tax cuts that make a change in tax policy necessary. He concludes with good and bad ways to raise income tax revenues.
Published: 06/01/07
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Eligibility for Child Tax Credit by Age of Child (Research Report)
Author(s):
Leonard E. Burman , Laura Wheaton
The child tax credit (CTC) is a $1,000 partially refundable federal income tax credit for each qualifying child under age 17. In 2007, tax filers may claim a refundable credit (over and above any tax liability) equal to 15 percent of the excess of earnings over $11,750, up to the $1,000 maximum per child. The earnings threshold means that families with very low incomes get no benefit from the credit, and others will receive only a partial credit. This brief analysis shows that many families with young children tend have lower incomes and are thus left out. In 2007, 30 percent of qualifying children under age 2 in working families had family incomes too low to benefit from the full credit, compared with 27 percent of children overall and 24 percent of children 10 and older.
Published: 05/22/07
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Rising Economic Inequality and Tax Policy (slideshow) (Slideshows)
Author(s):
Leonard E. Burman
Burman outlines rising economic inequality with graphs of income distribution. The slideshow also presents some reasons for this rising inequality, including technology and trade. Burman points to tax policy and specifically a more progressive tax system as a way to mitigate some of the rising inequality.
Published: 05/01/07
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