Newsletter Archive
June 27, 2007
The Tax Policy Center Newsletter
The AMT threatens to grow from a footnote in the tax code to a major scourge affecting tens of millions of taxpayers every year. The practice in recent years has been to patch the AMT every year or two on a temporary basis so that not too many people are affected. The latest patch expired at the end of 2006. This testimony outlines how the AMT works, whom it affects, why it demands attention, and why financing AMT repeal or reform is important. Burman lays out a number of fiscally responsible options to fix or eliminate the AMT and discusses their effects on the distribution of tax burdens, the number of AMT taxpayers, and marginal tax rates.
Read the complete testimony
Year after year, tax policy debates swirl around whether and how to tax capital income, the earnings from returns on assets and savings. The controversy arises from the concentration of assets among higher-income groups and the importance of capital to a growing economy. A new Urban Institute Press book delves into the intricacies of how the U.S. tax system deals with capital income and what switching to a consumption tax might mean. In Taxing Capital Income, 20 of the nation?s leading tax experts tackle three questions integral to capital income: Do we tax it? Should we tax it? Can we tax it?
Taxing Capital Income, edited by Henry J. Aaron, Leonard E. Burman, and C. Eugene Steuerle, is available from the Urban Institute Press for $29.50 (336 pages, ISBN 978-0-87766-737-7). Order online at http://www.uipress.org or call 202-261-5687.
Americans are taught from an early age to aspire to homeownership, and several long-standing federal institutions and regulations support owner-occupied residential housing. The income tax deduction for mortgage interest payments is possibly the best-known federal housing policy. Evidence suggests, however, that the mortgage interest deduction (MID) does little if anything to encourage homeownership. This paper proposes a tax credit and a subsidized saving vehicle for first-time home buyers, financed by the elimination of the MID. Relative to current policy or to the President's Advisory Panel's recommendations, these proposals would be less expensive, more progressive, and more effective in encouraging homeownership.
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