Taxpayers routinely have too much income tax withheld. Of the 126 million tax returns the IRS processed through April 17, 2015, almost three-quarters resulted in a refund. The average refund was $2,711 with higher average refunds going to the earliest filers.
The Earned Income Tax Credit (EITC) annually delivers over $60 billion to low-income working families. The Office of Management and Budget identifies the EITC as having the highest improper payment rate among 13 high error programs. We explore whether state SNAP and TANF administrative data can...
The earned income tax credit (EITC) lifts millions of working families out of poverty, but provides little support to workers without children living at home. Scaling back the EITC and implementing a worker credit based on individual earnings and not contingent on having children at home could...
The Earned Income Tax Credit (EITC) provides substantial assistance to low-income working families with children. The credit encourages work for many, though may reduce work or wages for some. Counted in the poverty measure, the EITC would have been credited with lifting 6.5 million people out...
People may purchase subsidized health insurance through the ACA exchanges with premiums based on projected future income. However, if actual income is higher than estimated, they may be required to repay part or all of the subsidy when they file tax returns. This “reconciliation” process could...
As income increases, the composition of income changes substantially. For most taxpayers, salaries and wages contribute the most. But higher-earners typically report income from capital gains and businesses.
We examine how tax policies alter investment incentives, with a particular focus on startup and innovative businesses. Consistent with prior work, we find that existing policies impose widely varying effective tax rates on investments in different industries and activities, favor debt over...
The White House announced a package of tax proposals as part of what President Obama called “Middle Class Economics” in the State of the Union Address. This paper summarizes and discusses TPC’s distributional estimates, focusing on the distribution of all income tax cuts, the major tax cut...
The composition of reported income has changed markedly since 1952. Investment income has continued to grow, along with business income, interrupted only by periodic economic downturns. Meanwhile, salaries and wages have declined as a share of income.
This brief examines net capital gains realizations by utilizing zip-code level data on taxes and demographics. This data can help shed light on direct beneficiaries of preferential capital gains tax rates beyond the standard distributional tables based solely on income. In particular, this brief...
Most People Receive Refunds at Tax Time
Taxpayers routinely have too much income tax withheld. Of the 126 million tax returns the IRS processed through April 17, 2015, almost three-quarters resulted in a refund. The average refund was $2,711 with higher average refunds going to the earliest filers.
Pilot Project to Assess Validation of EITC Eligibility with State Data
The Earned Income Tax Credit (EITC) annually delivers over $60 billion to low-income working families. The Office of Management and Budget identifies the EITC as having the highest improper payment rate among 13 high error programs. We explore whether state SNAP and TANF administrative data can...
Investing in Work by Reforming the Earned Income Tax Credit
The earned income tax credit (EITC) lifts millions of working families out of poverty, but provides little support to workers without children living at home. Scaling back the EITC and implementing a worker credit based on individual earnings and not contingent on having children at home could...
Earned Income Tax Credit in the United States
The Earned Income Tax Credit (EITC) provides substantial assistance to low-income working families with children. The credit encourages work for many, though may reduce work or wages for some. Counted in the poverty measure, the EITC would have been credited with lifting 6.5 million people out...
Tax Refunds and Affordable Care Act Reconciliation
People may purchase subsidized health insurance through the ACA exchanges with premiums based on projected future income. However, if actual income is higher than estimated, they may be required to repay part or all of the subsidy when they file tax returns. This “reconciliation” process could...
Composition of Income Reported on Tax Returns in 2012
As income increases, the composition of income changes substantially. For most taxpayers, salaries and wages contribute the most. But higher-earners typically report income from capital gains and businesses.
Tax Policy and Investment by Startups and Innovative Firms
We examine how tax policies alter investment incentives, with a particular focus on startup and innovative businesses. Consistent with prior work, we find that existing policies impose widely varying effective tax rates on investments in different industries and activities, favor debt over...
Distributional Effects of the President's New Tax Proposals
The White House announced a package of tax proposals as part of what President Obama called “Middle Class Economics” in the State of the Union Address. This paper summarizes and discusses TPC’s distributional estimates, focusing on the distribution of all income tax cuts, the major tax cut...
Changes in Income Reported On Federal Tax Returns
The composition of reported income has changed markedly since 1952. Investment income has continued to grow, along with business income, interrupted only by periodic economic downturns. Meanwhile, salaries and wages have declined as a share of income.
Net Capital Gains Across Zip Codes
This brief examines net capital gains realizations by utilizing zip-code level data on taxes and demographics. This data can help shed light on direct beneficiaries of preferential capital gains tax rates beyond the standard distributional tables based solely on income. In particular, this brief...