Lucy Dadayan is a principal research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, where she is leading the State Tax and...
The Constitution is clear that a president cannot spend money without a Congressional appropriation. It is less clear whether a president must spend money that...
Policymakers can raise revenues by modifying existing tax policy, enacting new taxes, and boosting economic activity. MODIFYING EXISTING TAX POLICY Congress could increase the tax...
The Tax Cuts and Jobs Act (TCJA) reduced tax rates on both business and individual income, and enhanced incentives for investment by firms. Those features...
Increasing Before-Tax Income Inequality Income inequality has increased sharply over the past 40 years. A simple way to measure inequality is by looking at the...
The Internal Revenue Service (IRS) administers the federal tax laws that Congress enacts. The IRS performs three main functions—tax return processing, taxpayer services, and enforcement...
Taxpayers can claim a standard deduction when filing their tax returns, thereby reducing their taxable income and the taxes they owe. In addition to the...
Taxpayers can either take a standard deduction or itemize their deductions to reduce the taxable income on their federal income tax return. Taxpayers typically choose...
Standard Deduction The Tax Cuts and Jobs Act (TCJA) increased the standard deduction from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for...
Before 2018, taxpayers could claim a personal exemption for themselves and each of their dependents. The amount would have been $4,150 for 2018, but the...
Tax Credits Tax credits are subtracted directly from a person’s tax liability; they therefore reduce taxes dollar for dollar. Credits have the same value for...
Many preferences in the tax code phase out for higher-income taxpayers, meaning their value declines after income reaches a certain level. Phaseouts target tax benefits...
The federal government provides individuals with financial assistance for higher education expenses in two major ways: traditional student aid (through loans, grants, and work study)...
Tax-favored accounts encourage families to save for education expenses by reducing or eliminating the tax normally owed. But there’s a catch: to reap significant benefits,...