Tax Policy Center Newsletter
June 18, 2008
$10 million fund to include $2.5 million challenge grant from the Bill & Melinda Gates Foundation
CONTACT:
Stu Kantor, (202) 261-5283, skantor@urban.org
Susan Kellam, (202) 797-6310, skellam@brookings.edu
WASHINGTON, D.C, June 18, 2008 - The Urban-Brookings Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, has launched a new intellectual venture capital fund to help policymakers, the public, and the media better understand the U.S. tax system and the policy challenges facing the nation over the next decade. The Opportunity Fund has been awarded a $2.5 million challenge grant from the Gates Foundation, which will match one dollar for every three dollars the fund receives before April 1, 2011.
The Tax Policy Center is well known for its timely, accessible, and nonpartisan analysis of tax issues. Prominent policy analysts from across the political spectrum, media outlets around the country, and leading researchers rely on the six-year-old center for facts, evidence, and clear explanations of complex topics. Using an innovative microsimulation model of the U.S. tax system, rapid analyses from the center allow scholars, government officials, and interested laypeople to understand the effects of reform options on tax revenues, the distribution of tax burdens, and incentives to work, save, and invest.
"Getting objective estimates and analyses into the public domain allows policy deliberations to unfold based on facts rather than spin, leading to improved decisionmaking," says Leonard Burman, director of the Tax Policy Center and a senior fellow at the Urban Institute. "With the Opportunity Fund, the Tax Policy Center will be able to broaden the scope of its activities - from more analyses of tax issues involving the environment, energy, business, and international trade to major investments in our economic models and increased public education through expanded communication."
The Tax Policy Center envisions using the Opportunity Fund to develop prototype tax reform options and clear assessments of their pros, cons, tradeoffs, and burdens; strengthen its capacity to analyze state, local, corporate, and international taxes; model the macroeconomic effects of current budget policies and escalating government debt; and allow users of www.taxpolicycenter.org to customize tables based on the center’s data and analysis, letting the public see how proposed and enacted legislation affect them and others.
A Challenge Grant for Challenging Times
Burman points to three approaching events sure to elevate public interest in tax policy. Most of the tax cuts enacted since 2000 are set to expire at the end of 2010, and the individual alternative minimum tax will hit 32 million taxpayers by 2010, up from 4 million in 2006. The retirement of 77 million baby boomers and the huge costs of providing their Social Security and medical care will put unprecedented demand on the tax system.
The tax system, moreover, has increasingly become the method of choice for delivering public services. For example, the largest cash assistance program for low-income working families (the earned income tax credit) and the largest new construction program for affordable housing (the low-income housing tax credit) are both tax programs. The increased reliance on tax expenditures means that tax reform directly affects the social safety net.
William Gale, codirector of the Tax Policy Center and a vice president and director of economic studies at the Brookings Institution, says the tax system faces chronic problems: "It is complex and inefficient. People in similar situations are often treated very differently and, as a result, many view the tax system as unfair. Taken together, these factors create a once-in-a-generation opportunity and an imperative to implement major tax reform."
If you would like to contribute to the Opportunity Fund or get more information, please contact Renee Hendley, 202-261-5615, rhendley@urban.org.
newsletter archive
