This chartbook explores the implications of the tax-advantaged treatment of pass-through income enacted as part of the Tax Cuts and Jobs Act of 2017 (TCJA). Section 199A of the TCJA allows a deduction from taxable income of 20 percent of certain pass-through income. We look specifically at the...
The Statistics of Income division of the Internal Revenue Service releases an annual public-use file of individual income tax returns that is invaluable to tax analysts in government agencies, nonprofit research organizations, and the private sector. However, the Statistics of Income division...
This report describes the Tax Policy Center (TPC) Microsimulation Model’s revamped health module. The TPC tax model uses the health module for simulating tax expenditures for health care, analyzing changes in the tax treatment of employer-provided health benefits, and evaluating health-related...
Federal tax law provides several tax benefits for homeowners. This chartbook focuses on the home mortgage interest deduction. We provide updated estimates of the distributional effects of the home mortgage interest deduction, show how those estimates could change if people pay down their home...
From 2010 through 2019, funding for the Internal Revenue Service (IRS) dropped by 24 percent, after adjustment for inflation. As a consequence, the percentage of taxpayers who were audited fell by nearly half. In this paper, we use confidential IRS data to compare the returns on investments (ROI...
Policymakers continue to grapple with the related issues of unequal incomes, relatively poor health, education, and economic outcomes for low-income children, and hardship among low- and...
State tax revenues showed continued growth in the first half of fiscal year 2020. State government tax revenues from major sources showed solid year-over-year growth at 6.6 percent in the fourth quarter of 2019. Preliminary data show strong growth in January and February before declines in March...
We examine how proposals to modify and expand the EITC would change its impacts during economic downturns. Using components from the Economic Security Project’s Cost-of-Living Refund, we identify three main effects. First, accelerating the credit phase-in (or eliminating it entirely) would...
Federal tax law provides substantial tax incentives for retirement saving. These include the deferral of taxes on contributions to retirement savings accounts by employers, employees, and self-employed taxpayers and the earnings on these contributions until the funds are withdrawn in retirement...
In this report, we compare revenue equivalent alternatives to the $10,000 annual limit on the state and local tax (SALT) deduction enacted in the 2017 Tax Cuts and Jobs Act (TCJA). We consider options that would limit all itemized deductions, not just the SALT deduction, and an additional option...
Tax Incentives for Pass-Through Income
This chartbook explores the implications of the tax-advantaged treatment of pass-through income enacted as part of the Tax Cuts and Jobs Act of 2017 (TCJA). Section 199A of the TCJA allows a deduction from taxable income of 20 percent of certain pass-through income. We look specifically at the...
A Synthetic Supplemental Public-Use File of Low-Income Information Return Data: Methodology, Utility, and Privacy Implications
The Statistics of Income division of the Internal Revenue Service releases an annual public-use file of individual income tax returns that is invaluable to tax analysts in government agencies, nonprofit research organizations, and the private sector. However, the Statistics of Income division...
Description of the Tax Policy Center Microsimulation Model's Revamped Health Module
This report describes the Tax Policy Center (TPC) Microsimulation Model’s revamped health module. The TPC tax model uses the health module for simulating tax expenditures for health care, analyzing changes in the tax treatment of employer-provided health benefits, and evaluating health-related...
Effects of Tax Incentives on Homeownership
Federal tax law provides several tax benefits for homeowners. This chartbook focuses on the home mortgage interest deduction. We provide updated estimates of the distributional effects of the home mortgage interest deduction, show how those estimates could change if people pay down their home...
Effects of Recent Reductions in the Internal Revenue Service’s Appropriations on Returns on Investment
From 2010 through 2019, funding for the Internal Revenue Service (IRS) dropped by 24 percent, after adjustment for inflation. As a consequence, the percentage of taxpayers who were audited fell by nearly half. In this paper, we use confidential IRS data to compare the returns on investments (ROI...
Understanding the Maze of Recent Child and Work Incentive Proposals
Policymakers continue to grapple with the related issues of unequal incomes, relatively poor health, education, and economic outcomes for low-income children, and hardship among low- and...
State Tax and Economic Review, 2019 Quarter 4
State tax revenues showed continued growth in the first half of fiscal year 2020. State government tax revenues from major sources showed solid year-over-year growth at 6.6 percent in the fourth quarter of 2019. Preliminary data show strong growth in January and February before declines in March...
Design Changes Can Strengthen the EITC During Recessions
We examine how proposals to modify and expand the EITC would change its impacts during economic downturns. Using components from the Economic Security Project’s Cost-of-Living Refund, we identify three main effects. First, accelerating the credit phase-in (or eliminating it entirely) would...
Tax Incentives for Retirement Savings
Federal tax law provides substantial tax incentives for retirement saving. These include the deferral of taxes on contributions to retirement savings accounts by employers, employees, and self-employed taxpayers and the earnings on these contributions until the funds are withdrawn in retirement...
Alternatives to the TCJA Limit on the State and Local Tax Deduction
In this report, we compare revenue equivalent alternatives to the $10,000 annual limit on the state and local tax (SALT) deduction enacted in the 2017 Tax Cuts and Jobs Act (TCJA). We consider options that would limit all itemized deductions, not just the SALT deduction, and an additional option...