Research report

One of the most vexing and contentious issues in taxation is the proper treatment of capital gains-the increase in value of an asset such as shares of company stock or a business. In principle, under an income tax, capital gains should be included in the tax base as they accrue. In practice, if...

March 25, 2009
Leonard E. Burman
Research report

Some tax proposals would reduce the marginal corporate tax rate. Others would boost the top individual rate. Although a differential between corporate and individual rates could reduce the overall tax on distributed corporate income, it could also enable higher-income taxpayers to shelter income...

July 29, 2009
Dan Halperin
Research report

Overall, the federal tax system is progressive. On average, households with higher incomes pay taxes that are a larger share of their income. But barring legislative action, the numerous sunsets and phase-ins that Congress has written into the tax code will result in a tax system that is in a...

August 21, 2009
Rachel M. Johnson, Jeffrey Rohaly
Research report

The Volcker task force on tax reform, part of the President's Economic Recovery Advisory Board, faces a daunting task that is made materially more difficult by ex ante constraints placed on its purview and recommendations. Broad-based reform proposals seem to be out of the question, and...

September 9, 2009
William G. Gale
Research report

There are several justifications for the corporate tax, including the claim that the corporate tax enhances progressivity in the tax code. This claim is based on two assumptions. One, that corporate tax incidence is primarily borne by capital (as opposed to labor); and two, that capital is...

November 23, 2009
Benjamin H. Harris
Research report

One arguably good thing about the current financial crisis is that it has broadened public understanding of the global financial system. Few people had heard of credit default swaps two years ago, but these instruments have, since then, forced themselves on the attention the most casual reader...

December 9, 2009
Lawrence Lokken
Research report

The dependent exemption reduces taxable income by a fixed amount ($3,650 in 2010) for each qualifying child in the family. Benefits depend on a family's marginal tax rate. Low-income families receive a tax reduction of up to $365 per exemption compared to high income families that receive a tax...

December 30, 2010
Elaine Maag
Research report

The Wyden-Gregg tax reform proposal would represent a broad reform of the federal income tax system. This paper examines the plan's impact on individuals' effective marginal tax rates (EMTR), the incremental amount of tax owed on an additional dollar of income. We examine the impact on the EMTR...

July 14, 2010
Katherine Lim, Jeffrey Rohaly
Research report

The Bipartisan Tax Fairness and Simplification Act of 2010 ("Wyden-Gregg," introduced as S. 3018) is a broad reform of the federal income tax system. Some provisions would also expand the Social Security payroll tax base. This paper presents the Tax Policy Center's estimates of the revenue and...

May 24, 2010
James R. Nunns, Jeffrey Rohaly
Research report

The value of the tax preference for pensions depends on the marginal tax schedule and on the tax treatment of income from assets held outside a pension account. We find that changes in U.S. tax law, especially the reduction in tax rates on capital gains and dividends, but also the decline in...

May 19, 2010
Gary T. Burtless, Eric Toder