Newsletter Archive

August 31, 2005

See below for the latest from the Urban-Brookings Tax Policy Center:

• The Impact of Repealing State and Local Tax Deductibility
  Kim Rueben
  August 15, 2005
• Suppose They Took the AM out of the AMT
  Leonard E. Burman and David Weiner
  August 25, 2005
• The Distributional Consequences of Federal Assistance for Higher Education: The Intersection of Tax and Spending Programs
  Leonard E. Burman, Elaine Maag, Peter R. Orszag, Jeff Rohaly and John O'Hare
  August 19, 2005

The Impact of Repealing State and Local Tax Deductibility
Kim Rueben
August 15, 2005

The main tax deduction not explicitly listed for protection when the President convened a panel to consider tax reform is the deductibility of state and local taxes. This paper looks at the effect of repealing deductibility of state and local taxes (both with and without retaining the AMT) on federal revenues, the distribution of tax burdens across income groups, and taxpayers affected by the AMT over both the short and longer terms.

Suppose They Took the AM out of the AMT
Leonard E. Burman and David Weiner
August 25, 2005

As the President's Tax Reform Panel considers it options for reform, some advocate making the alternative minimum tax (AMT) the regular tax system. The AMT is thought to have a broader base and lower rates; in the near future, it would even raise more revenue than the regular income tax system without an AMT. This paper shows that, as a stand-alone tax, the AMT would be a deeply flawed tax base: most people face higher rates under the AMT, it can impose large marriage penalties, and people's tax bills go up every year simply because of inflation. The paper compares some income tax reform options to variants built around the AMT base.

The Distributional Consequences of Federal Assistance for Higher Education: The Intersection of Tax and Spending Programs
Leonard E. Burman, Elaine Maag, Peter R. Orszag, Jeff Rohaly and John O'Hare
August 19, 2005

Over the past decade, federal higher education subsidies have increasingly shifted from direct expenditure programs, like Pell Grants and loan subsidies, to the tax code via tax credits and deductions. This paper examines how this shift affects who benefits from such subsidies and how some prototypical policy changes could alter the distribution of winners and losers.

For more on the Perspectives on Tax Reform series, visit http://www.taxpolicycenter.org/newsevents/events_prelude_series.

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