Analysts often add up tax expenditures to estimate an aggregate cost, but those tallies are inaccurate because they ignore interactions among provisions. We estimate that interactions raise the cost of nonbusiness tax expenditures by 5 to 8 percent, depending on whether an AMT patch is in effect...
This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. It describes how mortality, earnings, disability,...
From an economic perspective, marginal tax rates play a critical role in determining the consequences of a change in tax policy. In an uncomplicated tax system the marginal rate is simply equal to the statutory rate. For millions of taxpayers, however, marginal tax rates differ markedly from...
Education is a key pathway out of poverty, yet schools that primarily serve minority students often fail to provide the educational opportunities available in predominantly white schools. A series of state court cases has addressed one cause of that disparity, the dramatic funding differences...
Tax policy has been a major issue in the Presidential election campaign, with both candidates proposing extensive changes. The candidates take very different approaches to tax policy. The main differences are two: first, McCain's plans would reduce revenues by significantly more than Obama's;...
One promising aspect of retirement saving policy in recent years is the "automatic" or opt-out features in 401(k) plans. Automatic 401(k)s enable saving even if the worker makes no effort to participate in their 401(k) plan. Prior research has shown that automatic enrollment increased...
In response to the deterioration of the economy and the decline in asset values, Senators McCain and Obama have offered new proposals related to unemployment compensation, retirement savings, taxation of capital gains, and job creation. Although the proposals would provide some benefit, they...
The Earned Income Tax Credit enjoyed marked success bringing low-income women into the labor force in recent years. At the same time, labor force participation by low-income or less-education men stagnated, and declined among young black men. In response to these labor market conditions, this...
In this paper we review the current wealth transfer tax rules and the changes introduced in 2001. We offer an overview of the methodology underlying the TPC's estate tax model and then use the model to estimate the number of estate tax filers, taxable returns, and the distribution of burden...
A taxpayer's effective marginal tax rate (EMTR) is the percentage of an additional dollar of income that would be paid in federal income tax. An individual's EMTR could affect the decision to work or save more, or avoid income tax. We use the TPC's microsimulation model of the federal tax system...
How Big Are Total Individual Income Tax Expenditures, and Who Benefits from Them?
Analysts often add up tax expenditures to estimate an aggregate cost, but those tallies are inaccurate because they ignore interactions among provisions. We estimate that interactions raise the cost of nonbusiness tax expenditures by 5 to 8 percent, depending on whether an AMT patch is in effect...
Are There Opportunities to Increase Social Security Progressivity despite Underfunding?
This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. It describes how mortality, earnings, disability,...
When Marginal and Statutory Tax Rates Differ
From an economic perspective, marginal tax rates play a critical role in determining the consequences of a change in tax policy. In an uncomplicated tax system the marginal rate is simply equal to the statutory rate. For millions of taxpayers, however, marginal tax rates differ markedly from...
Racial Disparities in Education Finance: Going Beyond Equal Revenues
Education is a key pathway out of poverty, yet schools that primarily serve minority students often fail to provide the educational opportunities available in predominantly white schools. A series of state court cases has addressed one cause of that disparity, the dramatic funding differences...
Taxes under Obama and McCain
Tax policy has been a major issue in the Presidential election campaign, with both candidates proposing extensive changes. The candidates take very different approaches to tax policy. The main differences are two: first, McCain's plans would reduce revenues by significantly more than Obama's;...
The Automatic 401(k): Revenue & Distributional Estimates
One promising aspect of retirement saving policy in recent years is the "automatic" or opt-out features in 401(k) plans. Automatic 401(k)s enable saving even if the worker makes no effort to participate in their 401(k) plan. Prior research has shown that automatic enrollment increased...
The Presidential Candidates' New Tax Proposals - October 27, 2008
In response to the deterioration of the economy and the decline in asset values, Senators McCain and Obama have offered new proposals related to unemployment compensation, retirement savings, taxation of capital gains, and job creation. Although the proposals would provide some benefit, they...
The Next Stage for Social Policy
The Earned Income Tax Credit enjoyed marked success bringing low-income women into the labor force in recent years. At the same time, labor force participation by low-income or less-education men stagnated, and declined among young black men. In response to these labor market conditions, this...
Back from the Grave
In this paper we review the current wealth transfer tax rules and the changes introduced in 2001. We offer an overview of the methodology underlying the TPC's estate tax model and then use the model to estimate the number of estate tax filers, taxable returns, and the distribution of burden...
The Impact of the Presidential Candidates' Tax Proposals on Effective Marginal Tax Rates
A taxpayer's effective marginal tax rate (EMTR) is the percentage of an additional dollar of income that would be paid in federal income tax. An individual's EMTR could affect the decision to work or save more, or avoid income tax. We use the TPC's microsimulation model of the federal tax system...