: TaxVox

No October Surprise, So Far

On the Hill… The Senate and House passed funding bills to keep the government open through December 11, with just the usual minutes to spare. Now that that’s taken care of, the Senate Finance Committee holds a hearing today on improper payments in federal programs. Comptroller General of the United
October 1, 2015Renu Zaretsky
Individual Taxes

T15-0138 - Tax Units with Zero or Negative Income Tax

September 30, 2015
: TaxVox

Thirty days, goodbye September, shutdown talks? Maybe in December.

About that possible government shutdown… The Senate passed a continuing resolution to fund the government through December 11. Senate Majority Leader Mitch McConnell and outgoing Speaker of the House John Boehner will meet with President Obama “soon” for budget negotiations , and the House is on
September 30, 2015Renu Zaretsky
Individual Taxes: Research report

Using Supplemental Nutrition Assistance Program Data in Earned Income Tax Credit Administration

A Case Study of Florida SNAP Data Linked to IRS Tax Return Data
The earned income tax credit (EITC) is the most effective antipoverty program targeted to working-age households, delivering $60 annually. Critics note a relatively high error rate – with errors often stemming from complicated rules about who counts as a “qualifying child”. We analyze data from the
September 30, 2015Elaine MaagMike PergamitDevlin HansonCaroline RatcliffeSara EdelsteinSarah Minton
: TaxVox

Not October yet, but, oh, the tax tricks and treats!

Donald Trump unveiled his tax plan—is it going to “cost him a fortune?” He has a tax cut for nearly everybody , but the highest income households would likely be the biggest beneficiaries. And his plan would likely add trillions to the national debt over the next decade, concludes TPC’s Howard
September 29, 2015Renu Zaretsky
Campaigns, Proposals, and Reforms: TaxVox

Trump Proposes a Huge Tax Cut

Donald Trump, who likes superlatives, has weighed in with his version of a standard cut-the-rates, broaden-the-base tax reform . And like many other GOP tax rewrite proposals, this one appears to be an enormous tax cut skewed largely in favor of high-income households. While Trump claims the plan
September 28, 2015Howard Gleckman
: Daily Deduction

A Resignation, and… Resignation

Speaker of the House John Boehner resigns. His resignation—in the wake of a conservative effort to overthrow him—increases the chances that Congress will fund the government at current levels through December 11 and avoid a shutdown this week. The Senate plans to approve a 10-week continuing
September 28, 2015Renu Zaretsky
: Daily Deduction

Fairness, Cheating, and Certainty

Next week on the Hill … Maybe a shutdown , maybe not, and also a couple of Senate Finance Committee hearings. On Tuesday, the panel will hold a hearing on Puerto Rico’s debt crisis . On Thursday, it will consider improper payments made through federal programs including Medicare, Medicaid, and the
September 25, 2015Renu Zaretsky
State and Local Issues: TaxVox

The Trouble with State Tax Triggers

State policymakers are increasingly using “triggers” to pass big tax cuts while ducking tough decisions on how to pay for them. They are bad tax policy. Naturally, they are incredibly popular. Here’s how a tax trigger works: A state cuts taxes over a period of years. There may be an initial tax cut
September 24, 2015Norton Francis
: Daily Deduction

A lawmaker's work is never done.

On the Hill today… The Senate plans to vote on a continuing resolution to fund the government from October 1 through December 11. The continuing resolution includes a provision to defund Planned Parenthood, a move that could actually cost $130 million over 10 years because the government would have
September 24, 2015Renu Zaretsky
: Daily Deduction

That bipartisanship has sailed, for now.

Remember that bipartisan disdain for the carried interest loophole? Don’t count on its demise anytime soon . GOP lawmakers are willing to discuss it as part of broader tax reform, but it will not be a part of budget negotiations in advance of the October 1 government shut down-deadline. Democratic
September 23, 2015Renu Zaretsky
: Daily Deduction

Inversions, Schools, and Supermarkets

Inversion rules are on hold, for now. It’s been a year since Treasury warned that it would crack down on corporate inversions—buying a share of foreign company and using its mailing address to garner a lower tax rate. Why so long a wait ? “I think the Treasury is simply stymied,” said TPC’s Steve
September 22, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Senate Democrats Would Take Some Small Steps To Clean Up Energy Tax Breaks

A group of 28 Senate Democrats has proposed a major new energy bill that includes what they call significant reforms in the dozens of tax breaks aimed at encouraging the production and use of clean energy. I’ll let real energy policy experts speak to the broader bill, but the tax provisions are
September 21, 2015Howard Gleckman
: TaxVox

Time Keeps Ticking, States Keep Cutting

On the Hill: A Freeze, a Pontiff, and a Looming Deadline. The House voted to freeze funding for Planned Parenthood, hoping it could help avert a shutdown by appeasing 31 seemingly-unappeasable Republicans who want to defund the organization completely. Meanwhile, the Iran deal remains a sore point
September 21, 2015Renu Zaretsky
: Daily Deduction

All’s Fair in Tax Breaks and Hikes… Or Not.

Whither carried interest? The New York Times considers a growing bipartisan consensus against the loophole, fueled by this week’s GOP presidential debate . “Carried interest” refers to the share of investment gains earned as compensation by hedge fund managers, private equity executives, and
September 18, 2015Renu Zaretsky
State and Local Issues: TaxVox

Most State Budgets Are Improving But Their Long-Term Prospects Remain Uncertain

If you are not an energy dependent state, things ought to be pretty good, at least in the short-term. The economy is improving, though slowly, The Rockefeller Institute reported this morning that state tax revenues grew by 5.8 percent in the first quarter of this year and by 7.6 percent in the
September 17, 2015Howard Gleckman
State and Local Issues: Panel

State of the States: How will today’s tax and budget choices affect states’ futures?

With an improving economy, most state coffers have also recovered. But governors and legislators are engaged in intense battles over spending and tax priorities that...
September 17, 2015
: Daily Deduction

Breaks, Penalties, and Extenders

Can’t we all just get along? (and end the carried interest tax break?) Private equity and hedge fund managers can currently count compensation from the funds they manage as capital gains. Treasury estimates that taxing those payments as ordinary income could boost tax revenues by $18 billion over a
September 17, 2015Renu Zaretsky
Campaigns, Proposals, and Reforms: TaxVox

Despite Promises, Jeb Bush’s Tax Plan Wouldn’t Eliminate Marriage Penalties

GOP presidential candidate Jeb Bush offered a tax plan last week that he says “eliminates the marriage penalty.” But it may not help many low-income working families. A married couple is penalized if it pays more tax filing a joint return than if each spouse could file individually. Conversely,
September 16, 2015Roberton C. Williams
: Daily Deduction

Cuts, Hikes, and Bets

Debt and Tax Cuts: What’s not to love? Several GOP candidates trumpet tax plans that would add to the deficit . As The Hill reports, while they might not promise that tax cuts will pay for themselves, they do claim overhauling the tax code would spur economic growth. True or not, it’s rather
September 16, 2015Renu Zaretsky
Individual Taxes: Research report

Social Security and Medicare Lifetime Benefits and Taxes

How big is your retirement package? Benefits from government retirement programs—Social Security and Medicare—vary over time, but the trend has been toward higher lifetime benefits for each successive cohort. Expansion derives mainly from increases in real annual benefits, more years of benefits
September 16, 2015C. Eugene SteuerleCaleb Quakenbush
: Daily Deduction

Plans, Goals, and Budget Holes

GOP Candidate Jeb Bush’s tax plan hits New Jersey especially hard. Jeb Bush would eliminate the state and local tax deduction from the individual income tax. That includes state income and local property taxes. “The state has a lot of wealthy residents who pay a relatively high amount in state and
September 15, 2015Renu Zaretsky
: Daily Deduction

Deadlines, Crackdowns, and Subsidies

The highway funding deadline could stretch well past October 29. The Transportation Department says current highway funding could last into 2016 . That could give Congress an extra six months to finalize a long-term infrastructure funding plan—but also remove the pressure for lawmakers to act any
September 14, 2015Renu Zaretsky
Individual Taxes: TaxVox

Tax Subsidies for Childcare Expenses Target Middle-Income Families, Missing Many Poor Parents

Congress created two tax benefits to help offset work-related childcare expenses-- the Child and Dependent Care Tax Credit (CDCTC) and the employer-provided childcare exclusion. But recently released data from the Treasury show that neither helps many of those parents who struggle the most to pay
September 11, 2015Elaine Maag
: Daily Deduction

Maybe to make money, you have to spend money… but not in tax policy.

Jeb Bush backers say his tax plan could cost up to $3.4 trillion over ten years. As TPC’s Bill Gale notes , “Bush’s plan is a welcome addition to the policy debate. It is rare to see a candidate propose to eliminate or curtail provisions for state and local taxes, business interest payments,
September 11, 2015Renu Zaretsky