Brief

The American Rescue Plan temporarily increased the child tax credit (CTC) in 2021, including extending the credit to families who had not previously filed tax returns. The Internal Revenue Service automatically sent monthly payments of the CTC to families that had filed a tax return in 2019 or...

May 18, 2022
Fay WalkerElaine Maag
Brief

Legislated changes affecting capital income have dramatically reduced the federal income tax base and revenues over the past 25 years. A significant share of capital income is never subject to tax. The massive “leakage” between the generation of economic income and the reporting of income on tax...

April 20, 2022
William G. GaleSwati JoshiChristopher PulliamJohn Sabelhaus
Brief

The Tax Cuts and Jobs Act of 2017 (TCJA) dramatically changed tax law, including how taxpayers deduct the interest on their home mortgages. It narrowed the deduction in several ways, so we would expect new mortgages to be smaller than old ones. But it also raised most taxpayers’ after-tax...

March 30, 2022
Robert McClellandLivia MuccioloSafia Sayed
Brief

In this policy brief, we explore the tax implications of the fact that most of the economic income generated by closely held businesses (that is, businesses other than corporations) in the United States does not show up on tax forms. Understanding the sources of this discrepancy—including tax...

February 23, 2022
William G. GaleSwati JoshiChristopher PulliamJohn Sabelhaus
Brief

The “tax gap”—the difference between the amount of taxes owed and the amount of tax actually paid—includes substantial gray areas where the law is ambiguous and the IRS’s determination of taxes owed is debatable. Understanding the tax gap’s shades of gray can inform discussions of tax law and...

February 22, 2022
Daniel HemelJanet HoltzblattSteven M. Rosenthal
Brief

This policy brief summarizes a new paper (Gale et al. 2022a) in which we develop and refine methods for estimating income tax liabilities in public-use Survey of Consumer Finances (SCF) micro data files. Most recently conducted in 2019, the SCF is a triennial household survey with extensive...

February 8, 2022
William G. GaleSwati JoshiChristopher PulliamJohn Sabelhaus
Brief

The Urban-Brookings Tax Policy Center (TPC) large-scale microsimulation model produces estimates of how current and proposed tax policies will affect federal revenues and the distribution of tax burdens by income. The model is similar to those used by the Congressional...

December 17, 2021
Benjamin R. Page
Brief

President Biden’s fiscal year 2022 budget proposals were big and diffuse. They, and much of what Congress has considered since then, would also often be temporary. Despite once-in-a-generation policy changes, the real growth in federal spending that either administration or congressional...

December 16, 2021
C. Eugene SteuerleAlexander Carther
Brief

In the wake of the COVID-19 pandemic, city leaders are working to tackle structural inequities in access to wealth and opportunity. An infusion of federal dollars from the Infrastructure Investment and Jobs Act and American Rescue Plan Act provides an opportunity to rethink past budget choices....

December 1, 2021
Aravind BoddupalliTracy GordonLourdes Germán
Brief

By examining federal aid to state and local governments during the Great Recession, we draw lessons that can inform current state and local efforts to build an inclusive economic recovery from the COVID-19 pandemic. We primarily compare the American Recovery and Reinvestment Act of 2009 with the...

November 19, 2021
Aravind BoddupalliNikhita AiriTracy GordonSolomon Greene