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...
Within the Executive Branch, only the Treasury Department is equipped to deal well with the political crisis surrounding the imposition of the alternative minimum tax on tens of millions of taxpayers.
The current economic downturn is putting heavy pressure on state budgets. The National Conference of State Legislatures estimated that as states were drawing up their fiscal year 2003 budgets, more than a quarter faced deficits exceeding 10 percent of their general fund budgets. In response,...
Despite a brief upturn in the early- to mid-1990s, the profits of nonfinancial corporations have dropped dramatically as a percentage of GDP in recent decades and are near an all-time low. Does this mean that owners of corporate capital are worse off? Not necessarily. The owners of corporations...
The practice of requiring well-to-do Americans to pay a minimum tax was developed more than three decades ago. In January, 1969, then-Treasury Secretary Joseph W. Barr informed Congress that 155 individual taxpayers with income exceeding $200,000 paid no tax in 1966. The news set off a political...
Originally targeted at high-income households, the individual alternative minimum tax (AMT) is now on the verge of switching from a "class" tax to a "mass" tax. Under current law, the AMT will encroach dramatically on the middle-class over the next decade and will become the de facto tax...
Critics of the elimination of the double taxation of corporate dividends point to budgetary and distributional concerns as reasons to oppose corporate-personal income tax integration. The criticisms do not, however, mean that integration represents bad tax policy.
Taxpayers pay alternative minimum tax (AMT) if their AMT liability exceeds their regular income tax. Originally targeted at a few high-income households who paid no federal income tax, this class tax is about to become a mass tax. The projected expansion occurs because the AMT is not indexed for...
Various provisions of the 2001 tax cut change the marriage penalties or subsidies lower- and middle-income households may face. We focus on the higher marriage penalties that heads of household filers marrying single filers often confront -- the loss of valuable children's tax benefits for which...
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...
Treasury's Upcoming Role in Formulating Tax Policy
Within the Executive Branch, only the Treasury Department is equipped to deal well with the political crisis surrounding the imposition of the alternative minimum tax on tens of millions of taxpayers.
Use of State General Revenue for Higher Education Declines
The current economic downturn is putting heavy pressure on state budgets. The National Conference of State Legislatures estimated that as states were drawing up their fiscal year 2003 budgets, more than a quarter faced deficits exceeding 10 percent of their general fund budgets. In response,...
The Remarkable Constancy in the Income Share of Corporate Capital
Despite a brief upturn in the early- to mid-1990s, the profits of nonfinancial corporations have dropped dramatically as a percentage of GDP in recent decades and are near an all-time low. Does this mean that owners of corporate capital are worse off? Not necessarily. The owners of corporations...
The AMT: Out of Control
The practice of requiring well-to-do Americans to pay a minimum tax was developed more than three decades ago. In January, 1969, then-Treasury Secretary Joseph W. Barr informed Congress that 155 individual taxpayers with income exceeding $200,000 paid no tax in 1966. The news set off a political...
The Individual AMT: Problems and Potential Solutions
Originally targeted at high-income households, the individual alternative minimum tax (AMT) is now on the verge of switching from a "class" tax to a "mass" tax. Under current law, the AMT will encroach dramatically on the middle-class over the next decade and will become the de facto tax...
Corporate Integration: Think Twice About the Possibilities
Critics of the elimination of the double taxation of corporate dividends point to budgetary and distributional concerns as reasons to oppose corporate-personal income tax integration. The criticisms do not, however, mean that integration represents bad tax policy.
By 2008, the AMT Will Cost More to Repeal Than the Regular Income Tax
Taxpayers pay alternative minimum tax (AMT) if their AMT liability exceeds their regular income tax. Originally targeted at a few high-income households who paid no federal income tax, this class tax is about to become a mass tax. The projected expansion occurs because the AMT is not indexed for...
Some Implications of the Revenue Shortfall
Here are fourteen implications of the revenue shortfall.
Saying 'I Do' after the 2001 Tax Cuts
Various provisions of the 2001 tax cut change the marriage penalties or subsidies lower- and middle-income households may face. We focus on the higher marriage penalties that heads of household filers marrying single filers often confront -- the loss of valuable children's tax benefits for which...