Almost 60 million taxpayers own individual retirement accounts (IRAs), which include traditional IRAs, Roth IRAs, Simplified Employee Pensions (SEP IRAs), and Savings Incentive Match Plans...
Causes of Marriage Bonuses and Penalties Marriage penalties and bonuses occur because income taxes apply to a couple, not to individual spouses. Under a progressive...
The 2017 Tax Cuts and Jobs Act (TCJA), included provisions that significantly reduced the impact of the alternative minimum tax (AMT). The TCJA enacted a...
STANDARD DEDUCTION/PERSONAL EXEMPTION Both personal exemptions (which were eliminated by the TCJA) and the standard deduction serve a similar purpose: they exempt a certain portion...
The President’s Budget The congressional budget process begins each year with the president submitting a budget for the following fiscal year. The president’s budget proposes...
Today’s congressional budget process has its origins in the Congressional Budget and Impoundment Control Act of 1974. That law sought to create a coherent procedure...
The congressional budget process begins each year with the president submitting a budget for the following fiscal year. Usually, Congress receives the budget no later...
Reconciliation legislation is passed through an expedited process. First, Congress passes a budget resolution containing “reconciliation instructions” telling congressional committees how much they need to...
The House and Senate budget committees are responsible for calculating whether the targets are being met. A House or Senate member may raise a point...
Overview PAYGO, which stands for “pay-as-you-go,” is a budget rule requiring that (using current law as the baseline) tax cuts as well as increases in...
The federal budget divides government spending into three categories, discretionary spending, mandatory or direct spending, and net interest. Discretionary spending, set in annual appropriations acts...
Congress often enacts temporary tax provisions, almost all of which are tax cuts. Some of these are made temporary to force review when they’re scheduled...
Economic activity reflects a balance between what people, businesses, and governments want to buy and what they want to sell. In the short run, demand...
The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate the budgetary effects of tax, spending, and regulatory legislation. The...
Economists often agree about the general effects of tax policy. For example, they agree that people respond to incentives, taxes can change incentives, and therefore...
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,...
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...
An automatic 401(k) is one that automatically enrolls workers in the plan, rather than requiring them to sign up. Eligible workers are assigned a default...
Low- and middle-income families receive significant income support through tax breaks, notably through refundable credits such as the earned income tax credit and the child...
Almost everyone agrees that the current tax system is too complicated, yet almost every year the system gets more complex, not less. Why? Tax simplicity...
