Budget scoring The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate the budgetary effects of tax, spending, and regulatory legislation. The...
Tax rates and revenues Economic activity generally responds to tax changes. If you increase the tax on cigarettes, people will smoke less and some will...
AREAS OF AGREEMENT Economists often agree about the general effects of tax policy. For example, they agree that people respond to incentives, taxes can change...
Monetary policy—adjustments to interest rates and the money supply—can play an important role in combatting economic slowdowns. Such adjustments can be made quickly, and monetary...
Automatic stabilizers offset fluctuations in economic activity without direct intervention by policymakers. When incomes are high, tax liabilities rise and eligibility for government benefits falls,...
Individuals, businesses, and other entities may have the legal obligation to pay certain taxes, but the economic burden (or incidence) of all taxes ultimately falls...
The overall federal tax system is progressive, with total federal tax burdens a larger percentage of income for higher-income households than for lower-income households. Not...
TPC produces distribution tables that provide information on how a tax proposal affects different households and thus the progressivity or regressivity of the tax system...
Distributional analyses of tax burdens across income groups play an important role in debates over the tax system and how to reform it. Differences in...
Distributional analyses omit the ways tax cuts and tax increases affect other government finances—through either lower (or higher) spending or higher (or lower) debt. These...
Every year, the Office of Management and Budget (OMB) and the congressional Joint Committee on Taxation (JCT) publish lists of tax expenditures. These lists, sometimes...
Most tax expenditures perform very much like spending programs, which means they may serve or harm the public depending on whether they serve a legitimate...