Publications by Topic
Topic: Pensions, Tax Incentives for Saving
Personal savings need a boost (Commentary)
Author(s):
Leonard E. Burman
The Washington Times. America's days of economic dominance are numbered because we don't save. The government is borrowing like crazy, and households aren't doing much better. The personal savings rate -- the share of after-tax income that people set aside for a rainy day -- has been falling like a stone since the early 1980s.
Published: 11/10/09
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Automatic Enrollment in IRAs: Costs and Benefits (Article/Tax Facts)
Author(s):
Benjamin H. Harris , Rachel M. Johnson
To encourage better retirement saving, President Obama recently proposed policies that would require firms without retirement savings plans to automatically enroll their workers in IRAs. In addition, the president proposed an expansion of the Saver's Credit to be fully refundable and available to middle-income taxpayers. This report estimates the revenue costs and distributional effects of the president's proposals.
Published: 08/31/09
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Distributional Effects of Tax Expenditures (Research Report)
Author(s):
Benjamin H. Harris , Katherine Lim , Eric Toder
The largest tax preferences for housing, health care, and retirement saving reduce federal revenues by about 3 percent of GDP. They raise after-tax income proportionally more for higher income groups than lower income groups, but raise income proportionately less for those at the very top. The net distributional effects depend on how these tax preferences are financed. If paid for with higher marginal tax rates, they benefit upper-middle income taxpayers at the expense of both lower-income and the highest-income taxpayers, but if paid for by lower per-capita spending, all high-income groups gain and all low-income groups lose.
Published: 07/21/09
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Beyond the Storm: New Reforms for 401(k) Plans (Document)
Author(s):
Benjamin H. Harris , Lina Walker
The financial crisis has provoked calls for a fundamental reform of the nation's retirement saving structure. This article argues that rather than dismantle the existing system, policymakers should build on existing reforms and expand the automatic 401(k) to help eligible workers save more and make better investment decisions. In addition, retirees should be given the opportunity to test-drive annuity products to realize the benefits of receiving stable retirement income, and near-retirees should be provided the option of incrementally purchasing annuity units over time to help mitigate the risk associated with varying interest rates.
Published: 06/11/09
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Taxation of Saving for Retirement: Current Rules and Alternative Reform Approaches (Research Report)
Author(s):
Eric Toder
Most advanced countries exempt returns to retirement saving from income tax, but private saving rates are falling and many people are saving too little for retirement. There is a trade-off between the goals of promoting wide participation in retirement saving plans and allowing more choice to employees. In the United States, purely employer funded plans have been replaced by plans that rely more on voluntary employee contributions, while private saving has declined. Two approaches that may promote more retirement saving are refundable tax credits for low-income workers and rules that encourage or require automatic enrollment in retirement saving plans.
Published: 04/02/09
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Tax Proposals in the 2010 Budget (Research Report)
Author(s):
Rosanne Altshuler , Leonard E. Burman , Howard Gleckman , Dan Halperin , Roberton Williams
President Obama's 2010 Budget contains a number of tax provisions that would cut taxes for low- and middle-income households and raise taxes on wealthier taxpayers. This resource guide describes the tax proposals, offers more detailed commentary on key provisions, and links to tables showing the distributional effects of the overall proposal and various elements of the plan.
Published: 03/16/09
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The Economic Crisis and the Fiscal Crisis: 2009 and Beyond (Research Report)
Author(s):
Alan J. Auerbach , William G. Gale
In 2009, the federal deficit will be larger as a share of the economy than at any time since the 1940s. After 2009, we project an average deficit of $1 trillion per year for the next 10 years, under optimistic assumptions. The longer-run picture is even bleaker, with a fiscal gap of 7-9 percent of GDP -- between $1 trillion and $1.3 trillion annually in current dollars. Recent trends in credit default swap markets suggest that although fiscal policy problems are usually described as medium- and long-term issues, these problems may be upon us much sooner than previously expected.
Published: 02/19/09
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The Automatic 401(k): Revenue & Distributional Estimates (Policy Briefs)
Author(s):
Christopher Geissler , Benjamin H. Harris
One promising aspect of retirement saving policy in recent years is the "automatic" or opt-out features in 401(k) plans. Automatic 401(k)s enable saving even if the worker makes no effort to participate in their 401(k) plan. Prior research has shown that automatic enrollment increased participation in 401(k) from 75 percent to as high as 90 percent of newly eligible employees; with the highest change among lower-income and minority workers. This paper provides estimates of the effects - on federal revenue and the distribution of after-tax income - of a policy under which all 401(k) plans are converted to automatic 401(k)s.
Published: 10/30/08
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How the Income Tax Treatment of Saving and Social Security Benefits May Affect Boomers' Retirement Incomes (Series/The Retirement Project Occasional Papers)
Author(s):
Barbara Butrica , Karen E. Smith , Eric Toder
Income tax provisions affect the buildup of retirement assets during workers' careers and after-tax income following retirement. This paper uses the Urban Institute's DYNASIM model to simulate how potential changes in the tax treatment of retirement saving, Social Security benefits, and income from assets outside retirement accounts may affect boomers' retirement incomes. Changes in the income thresholds for taxing Social Security benefits have the largest impact on middle-income boomers, while changes in contribution limits for retirement saving plans and tax rates on capital gains and dividends have the largest impact on the highest-income boomers.
Published: 03/14/08
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Taxpayer Eligibility for IRAs (Article/Tax Facts)
Author(s):
Benjamin H. Harris , Christopher Geissler
The tax code limits the extent to which individuals may take advantage of the tax benefits associated with traditional and Roth IRAs. The only eligibility criteria for contributing to a Roth IRA are income and filing status. In contrast, eligibility for deducting contributions to a traditional IRA depends on those factors as well as on whether the taxpayer and the taxpayer’s spouse participate in an employer-provided pension. Taxpayers are subject to an assortment of phaseout ranges based on those criteria.
Published: 03/07/08
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