The U.S. faces a large medium-term federal budget deficit and an unsustainable long-term fiscal gap. Left unattended, these shortfalls will hobble and eventually cripple the economy. The only plausible way to close the gap is through a combination of spending cuts and/or tax increases. This...

The current economic downturn has resulted in a sharp decline in state tax revenues. Forty-six states faced budget shortfalls when passing their fiscal year (FY) 2011 budgets, and 17 states reported shortfalls of more than 20 percent. According to the National Association of State Budget...

President Obama's 2012 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...

The Tax Policy Center has examined the key tax proposals in President Obama's 2011 budget. Separate discussions below describe each of the proposals including current law, proposed changes, and, when appropriate, the distributional effects. The budget as presented by the president lacks complete...

Tax expenditures are getting increased scrutiny from budget hawks and tax reformers. New Treasury estimates, released as part of President Obamas recent budget, indicate that these tax preferences will reduce individual and corporate income tax revenues by almost $1.1 trillion in 2011. Those...

The Tax Policy center has developed a new method for estimating the distributional effects among income groups of a broad-based consumption tax, such as a value-added tax (VAT). The new method provides separate measures of the long-run and transitional effects of introducing a VAT. In the long-...

A great deal of government spending is hidden in the federal tax code in the form of deductions, credits, and other preferences preferences that seem like they let taxpayers keep their own money, but are actually spending in disguise.

We present new estimates of the budget outlook, based on the latest projections from the Congressional Budget Office and the Medicare and Social Security Trustee reports. The medium-term and long-term budget outlook have not changed appreciably since last year. Under reasonable assumptions, the...

One possible explanation for the difficulty in controlling the budget is that a major component of spending-tax expenditures-receives privileged status. It is treated as tax cuts rather than spending. This paper explores the implications of that classification and illustrates how it can lead to...

The landmark Tax Reform Act of 1986 greatly changed the cost of tax expenditures. The revenue lost to tax expenditures declined sharply after enactment of the 1986 Act, falling from nearly 9 percent of total GDP in fiscal year 1985 to 6 percent in 1988. Since then, tax expenditures have...