Individual Taxes: TaxVox

A Small But Important Change in Retirement Savings Rules

Earlier this year, the Obama Administration proposed a small and almost unnoticed change in retirement savings rules that could be a big help to middle-income seniors who want to preserve assets to pay for medical and long-term care costs in very old age. The proposal would exempt those who have $
April 27, 2015Howard Gleckman
: Daily Deduction

On the Midwest and Methodology

Death to the Minnesota estate tax? Minnesota House Republicans want the state’s estate tax to affect fewer bequests, sooner . Right now, if a decedent’s is worth $1.4 million or more, the estate tax pays at a rate starting at 9 percent and rising to 16 percent. Fewer than 3 percent of Minnesota
April 27, 2015Renu Zaretsky
: Daily Deduction

Tax Deals, Tax Love

The GOP may be close to a budget deal. The Hill reports that House and Senate negotiators may be close to a deal on a budget resolution. Congress needs to complete final action on spending bills before October 1 when it faces the return of the sequester and a $1.017 trillion cap on military and
April 24, 2015Renu Zaretsky
Business Taxes: TaxVox

Could a Carbon Tax Finance Corporate Rate Cuts?

How about using revenue from a carbon tax to help pay for corporate tax rate cuts? That’s the idea proposed yesterday by Rep. John Delaney (D-MD). His political calculation: Democrats would back the bill as a way to reduce carbon emissions and slow climate change. Republicans would support the plan
April 23, 2015Howard Gleckman
: TaxVox

On Some States of Business Taxation and a US Carbon Tax Swap

In Nevada, the GOP governor ’ s $1 billion business tax hike wins support. The state senate passed Governor Brian Sandoval’s plan to shift the state’s flat $200 business license fee to a version of a gross receipts tax. According to the measure, which would raise nearly $1 billion over 2 years, the
April 23, 2015Renu Zaretsky
: TaxVox

Revenues and Rate Hikes: What’s an Elected Official to Do?

There’s a revenue surge in California. The state is exceeding its 2013 tax collections and beating 2014 forecasts. The Franchise Tax Board netted $7.6 billion in personal income taxes between April 1 and this past Monday. It collected $6 billion during the same period in 2014. The state’s school
April 22, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Tax Cuts for Low- and Moderate Income Households May Be Much More Powerful Than Cuts for the Rich

It turns out that tax cuts for the job creators...don’t create very many jobs. By contrast, tax cuts for low- and moderate-income households can boost economic growth. Those are the results of an interesting new working paper by Owen Zidar for the National Bureau of Economic Research. Zidar, an
April 21, 2015Howard Gleckman
: Daily Deduction

On Flat Taxes, Tax Relief, and Evidence

Flat tax chatter: Just small talk or a deeper conversation? The Hill examines GOP presidential hopefuls Rand Paul and Ted Cruz and their ideas for an across-the-board tax rate. A flat tax will disproportionately benefit higher earners, and even some in the GOP say that makes it a non-starter. But
April 21, 2015Renu Zaretsky
: Daily Deduction

How Does One Avoid Tax Increases? Let Us Count Some Ways.

The corporate-only tax reform could raise taxes on many small businesses, unless… TPC’s Eric Toder testified last week to the House Small Business Committee on how corporate tax reform could hurt small businesses that usually report income on their owner’s individual tax returns. In his latest blog
April 20, 2015Renu Zaretsky
Business Taxes: TaxVox

Corporate Tax Reform and Small Business

While there is no chance that Congress will agree to broad-based tax reform before the next president takes office in 2017, lawmakers are making one last effort to enact a more narrow business-based reform. But they face a big challenge: reforms under consideration could raise taxes paid by many
April 17, 2015Eric Toder
: TaxVox

Bipartisan or Partisan: Tax Efforts Abound

There’s a bipartisan House effort to double the federal gas tax. It would raise the 18.4 cents-per-gallon tax to about 30 cents, would be inflation adjusted, and would rise again in three years if Congress does not find another way to pay for federal transportation projects. The bill’s sponsors—
April 17, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Rubio Tries to Triangulate Tax Policy

Newly declared GOP presidential hopeful Senator Marco Rubio is trying something truly (Bill) Clintonesque—navigating between the demands of his party’s base and a more centrist, forward-looking political agenda. Nowhere is it more obvious than in tax policy. And nowhere is the road ahead more risky
April 16, 2015Howard Gleckman
: TaxVox

Death and Taxes: Certainty and Conflict

The House plans a vote to repeal the estate tax today. Repealing the levy would cut taxes by $270 billion over 10 years for 0.2 percent of the nation’s richest estates. The White House and Democrats are vehemently opposed . The Joint Committee on Taxation estimates that 5,400 estates will face the
April 16, 2015Renu Zaretsky
Individual Taxes: TaxVox

Why The Top 2 Percent Pay Lots of Tax: Evidence from President Obama’s 1040

The White House released Barack Obama’s 2014 tax return last week. It showed that the President and First Lady paid $93,362 in federal taxes on a total income of $477,383—an effective tax rate of 19.6 percent. But those are only the top-line numbers—their return contains lots of interesting
April 15, 2015Roberton C. Williams
: TaxVox

Happy Tax Day! Who Will Pay?

No Virginia. The One Percent don’t dodge federal taxes . In 2013, they paid 35.7 percent of their income in federal taxes. Low-income households don’t dodge, either. While many paid no income tax, nearly all paid payroll tax. You can start your Tax Day exploring these and other common myths as TPC’
April 15, 2015Renu Zaretsky
Business Taxes: Testimony

Tax Reform and Small Business

Eric Toder testified about tax reform and small business, before the House Committee on Small Business on April 15, 2015.
April 15, 2015Eric Toder
Individual Taxes: TaxVox

Busting Myths for Tax Day

Since Tax Day is tomorrow, it seems like a good time to bust a few myths about taxes. Here are five of the biggest misperceptions about the federal revenue code. Most of the info comes from two sources: the Tax Policy Center’s Tax Topics (a trove of great information about who pays what) and the
April 14, 2015Howard Gleckman
: TaxVox

Tax Ideas, A “Fix,” Limits and Honors

Paul Ryan and Orrin Hatch want businesses to share ideas on tax treatment of “pass-throughs.” As owners of pass-through businesses such as partnerships and sole proprietorships, millions of business owners pay their firms’ income taxes through the individual code. Both the GOP and the White House
April 14, 2015Renu Zaretsky
Individual Taxes: TaxVox

Why Stop At Food Stamps? Let’s Limit Use Of All Federal Benefits

Missouri State Representative Rick Brattin (R-55) has proposed a bill that would prohibit Missourians who participate in the Supplemental Nutrition Assistance Program (SNAP, aka food stamps) from using their benefits to buy “cookies, chips, energy drinks, soft drinks, seafood, or steak.” But why
April 13, 2015Roberton C. Williams
: TaxVox

Tax Season: It Ain’t Over Till It’s Over

The IRS and the ACA: Working hard and working well. The IRS, thanks to years of preparation since the Affordable Care Act became law in 2010, has managed the current tax filing season smoothly, according to IRS Commissioner John Koskinen , even with new ACA burdens and IRS budget cutbacks . “It's
April 13, 2015Renu Zaretsky
Individual Taxes: TaxVox

How much does the tax code reduce inequality?

This post originally appeared on Up Front , the Brookings Institution's blog. There is, for good reason, a lot of focus these days on the widening gap between the top and the bottom in the U.S. economy. Since it’s (almost) Tax Day, that April 15 deadline for filing tax returns, it’s a good time to
April 10, 2015David Wessel
Individual Taxes: TaxVox

What Will Happen To Voluntary Tax Compliance If a Budget-constrained IRS Is Not Fixed?

Is the IRS such a mess that the nation’s system of voluntary tax compliance is at risk? Will frustrated taxpayers rebel because they can’t get help with a revenue code they can’t understand? Will aggressive taxpayers who recognize that audit rates have plummeted to the lowest levels in years
April 9, 2015Howard Gleckman
Individual Taxes: Journal Article

Earned Income Tax Credit in the United States

The Earned Income Tax Credit (EITC) provides substantial assistance to low-income working families with children. The credit encourages work for many, though may reduce work or wages for some. Counted in the poverty measure, the EITC would have been credited with lifting 6.5 million people out of
April 9, 2015Elaine Maag
Individual Taxes

How do IRS budget cuts affect taxpayers and the tax system?

Congress has been reducing the budget of the Internal Revenue Service even as the IRS workload keeps increasing. How do IRS budget cuts affect the ability of honest taxpayers to comply with the law and the ability of the IRS to enforce the law? What can the IRS do to meet its responsibilities
April 8, 2015
Individual Taxes: TaxVox

Ferguson City Finances: Not the New Normal

The recently completed US Department of Justice (DOJ) investigation into Ferguson’s police department highlighted “the City’s focus on revenue rather than … public safety needs” when setting law enforcement priorities. It noted that fines and forfeitures nearly doubled as a share of the city’s
April 8, 2015Tracy Gordon