The President's stimulus plan would accelerate major elements of the income tax cuts enacted in 2001, provide additional temporary AMT relief, exempt dividends earned by individuals from income tax, and provide additional accelerated tax write-offs for small businesses. The tax provisions in the...
Recent policy discussions have raised the possibility of payroll tax cuts or income tax credits based on payroll tax payments. In 2003, workers and employers each owe 6.2 percent Social Security tax on the first $87,000 of a worker's earnings, and a 1.45 percent Medicare tax on all wages....
The figure shows one way to assess the federal income tax burden-federal income taxes as a share of income-for a family of four in the middle of the income distribution, and for similar families at twice and half that income level from 1955 to 2001. In 2001, the median family earned $63,278. By...
Since 1984, Social Security benefits have been partially subject to federal income tax. The share of benefits subject to tax depends on an expanded measure of income: adjusted gross income plus tax-exempt bond interest and one-half of Social Security benefits. Benefits are only subject to tax if...
When the income tax was first introduced in 1913, it boasted a top rate of a mere 7 percent on those earning above $500,000 (close to $9 million in 2002 dollars). For the nation's wealthiest taxpayers, this was as good as it was ever going to get - this state of affairs lasted just three years....
[Newsday] Currently affecting only a few, mostly wealthy, taxpayers, the alternative minimum tax (AMT) will expand dramatically over the next several years, visiting high tax rates and mind-numbingly complex paperwork on unsuspecting middle-class families. Prompt action could reverse...
This was the presidential address given at the National Tax Association meeting on November 14, 2002, exploring the long term developments in public finance. In particular, it focuses on four areas: First, both external events and the advancement of knowledge have brought public finance analysis...
The United States is often said to maintain a classical tax system, under which corporate profits are subject to double taxation, once at the corporate level when they are earned, and again at the individual level when they are paid out as dividends. The Bush administration is reportedly...
Concepts of equity and fairness are at the heart of tax policy. Yet, for all its populist appeal, tax equity is loosely understood and inconsistently applied. This concept comprises at least three distinct dimensions: horizontal, vertical, and individual equity. The very real tension among these...
A perpetual policy debate surrounds the proper taxation of capital gains. One concern is that the tax creates a "lock-in effect." That is, people will hold onto assets longer than they otherwise would in order to avoid the tax. If significant, the lock-in effect would represent an undesirable...
Tax Provisions in The President's Economic Stimulus Proposals
The President's stimulus plan would accelerate major elements of the income tax cuts enacted in 2001, provide additional temporary AMT relief, exempt dividends earned by individuals from income tax, and provide additional accelerated tax write-offs for small businesses. The tax provisions in the...
Three-Quarters of Filers Pay More in Payroll Taxes Than in Income Taxes
Recent policy discussions have raised the possibility of payroll tax cuts or income tax credits based on payroll tax payments. In 2003, workers and employers each owe 6.2 percent Social Security tax on the first $87,000 of a worker's earnings, and a 1.45 percent Medicare tax on all wages....
Income Tax Burden Peaked in the 1980s
The figure shows one way to assess the federal income tax burden-federal income taxes as a share of income-for a family of four in the middle of the income distribution, and for similar families at twice and half that income level from 1955 to 2001. In 2001, the median family earned $63,278. By...
Tax on Social Security Benefits Providing More Trust Fund Revenue
Since 1984, Social Security benefits have been partially subject to federal income tax. The share of benefits subject to tax depends on an expanded measure of income: adjusted gross income plus tax-exempt bond interest and one-half of Social Security benefits. Benefits are only subject to tax if...
A Brief History of the Top Tax Rate
When the income tax was first introduced in 1913, it boasted a top rate of a mere 7 percent on those earning above $500,000 (close to $9 million in 2002 dollars). For the nation's wealthiest taxpayers, this was as good as it was ever going to get - this state of affairs lasted just three years....
Fix a Real Tax Mess
[Newsday] Currently affecting only a few, mostly wealthy, taxpayers, the alternative minimum tax (AMT) will expand dramatically over the next several years, visiting high tax rates and mind-numbingly complex paperwork on unsuspecting middle-class families. Prompt action could reverse...
Some Future Directions for Public Finance
This was the presidential address given at the National Tax Association meeting on November 14, 2002, exploring the long term developments in public finance. In particular, it focuses on four areas: First, both external events and the advancement of knowledge have brought public finance analysis...
About Half of Dividend Payments Do Not Face Double Taxation
The United States is often said to maintain a classical tax system, under which corporate profits are subject to double taxation, once at the corporate level when they are earned, and again at the individual level when they are paid out as dividends. The Bush administration is reportedly...
And Equal (Tax) Justice for All?
Concepts of equity and fairness are at the heart of tax policy. Yet, for all its populist appeal, tax equity is loosely understood and inconsistently applied. This concept comprises at least three distinct dimensions: horizontal, vertical, and individual equity. The very real tension among these...
Individual and Corporate Capital Gains Are Highly Correlated
A perpetual policy debate surrounds the proper taxation of capital gains. One concern is that the tax creates a "lock-in effect." That is, people will hold onto assets longer than they otherwise would in order to avoid the tax. If significant, the lock-in effect would represent an undesirable...