Federal Budget and Economy: TaxVox

Hillary Clinton Outlines Her Play-It-Safe Tax Agenda

In what her campaign billed as a major economic policy speech today in New York, Democratic presidential frontrunner Hillary Clinton outlined her agenda for what she described as a Growth and Fairness Economy. And while she included a number of tax proposals, few were new. Indeed, the speech was
July 13, 2015Howard Gleckman
: TaxVox

Six-Year Road Funding, Renewals on Repeat, and Investigations

Highway funding: Will the House GOP play the long game? Ways & Means Chair Paul Ryan wants to pair international tax changes with six-year funding for highways, and he wants it done this year . To buy time to flesh out his plan to use revenue from a one-time tax on foreign profits of US
July 13, 2015Renu Zaretsky
: Daily Deduction

“Take me home, country road… To a fund (and a country), that’s not broke.”

Greece: "Ne" to new sales taxes and (maybe) tax reform. The beleaguered Greek government has offered a new reform plan in return for $55 billion in European Union bailout money—and it reportedly includes new sales taxes, new levies on cafes and restaurants (read: tourists) and possible tax reform,
July 10, 2015Renu Zaretsky
: Daily Deduction

Baskets, A Balk, Borders, and Budgets

The IRS goes after the “worst of the worst.” Bloomberg reports that the IRS will now classify the use of “basket options” —a strategy mastered by hedge fund Renaissance Technologies—as a “listed transaction.” The IRS flags these deals as tax shelters. TPC’s Steve Rosenthal explained, “They’re
July 9, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Finance Committee Working Groups: Tax Reform is Hard

After six months and two extensions, the Senate Finance Committee’s five tax reform working groups presented their reports today to panel chair Orrin Hatch (R-UT) and top Democrat Ron Wyden (D-OR). For the most part, they reached no consensus on either specific reforms or a broad design for overall
July 8, 2015Howard Gleckman
: Daily Deduction

There are at least eleven billion ways to stop work on roads.

Thirty-fourth verse: Same as the first. A six-year plan to fund roads and transit, costing around $90 billion, has gotten nowhere fast on the Hill. TPC’s Howard Gleckman considers Congress’ progress: It has about three weeks to come up with $11 billion to finance the highway trust fund through the
July 8, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

How Will Congress Fund Roads and Transit?

In 24 days, federal spending authority under the highway trust fund comes to an end. Without legislation to keep the program going and money to finance it, road projects will slow in the midst of high construction season. And where are Congress and the White House on this perennial issue? Nowhere.
July 7, 2015Howard Gleckman
: Daily Deduction

An Inversion, Taxing the Cloud, and Our Model

Corporations that ditched US mailing addresses may still get federal contracts. In a 2013 memo obtained by Bloomberg , manufacturer Ingersoll-Rand, which moved its corporate address from New Jersey to Bermuda and then to Ireland, argued that it shouldn’t be subject to a government ban on foreign
July 7, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

The Tax Policy Center Has Updated Its Tax Model

The Tax Policy Center has revised its microsimulation tax model, updating and broadening its underlying database and adding excise taxes to the mix of federal taxes it models. New baseline tables covering 2011-2025 largely match previous estimates, showing that Americans will pay an average of 19.8
July 6, 2015Roberton C. Williams
: Daily Deduction

The Long, Hot, Unfunded Summer?

On the Hill: Senate Democrats vow to block all GOP spending bills, while the House plans to spend the remaining weeks of July on two tasks. The first: Finding a way to extend the Highway Trust Fund. The second: Cutting IRS funding by 7.7 percent and barring the agency from using appropriated funds
July 6, 2015Renu Zaretsky
Individual Taxes: TaxVox

Who Benefits the Most from an Across-the-Board Cut in Individual Tax Rates?

Just about every tax reform plan calls for cutting individual tax rates. But it turns out that a one percentage point across-the-board rate cut would benefit only about six out of 10 households. The biggest beneficiaries: those with the highest incomes. According to a new Tax Policy Center analysis
July 2, 2015Howard Gleckman
Individual Taxes: Payroll

Historical Combined Income and Employee Tax Rates for a Family of Four

Historical Combined Income and Employee Tax Rates for a Family of Four, also including Employer Tax Rates from 1955 to 2014.
July 1, 2015
Individual Taxes: OverviewTax Burden

Historical Federal Income Tax Rates for a Family of Four

Average and marginal federal income tax rates for two-parent families of four at the same relative positions in the income distribution, from 1955 to 2014.
July 1, 2015
State and Local Issues: TaxVox

Puerto Rico: Not Your Father’s Debt Crisis – or Your Greek Uncle’s

In a remarkable statement, Governor Alejandro Garcia Padilla announced this week that Puerto Rico’s debts are “not payable.” Nobody was really surprised. The island can work its way out of this financial mess with a two-pronged strategy: An aggressive short-term effort to raise taxes, cut spending
July 1, 2015Tracy Gordon
Individual Taxes: TaxVox

MEGA tax credits: Will Michigan bust a deal, or will residents face the wheel?

In the classic post-apocalyptic film Mad Max: Beyond Thunderdome , those who back out of deals in Tina Turner’s Bartertown face a wheel of fortune...
July 1, 2015Renu Zaretsky
Individual Taxes

T15-0092 - Decrease All Statutory Individual Income Tax Rates by One Percentage Point, Baseline: Current Law, Distribution of Federal Tax Change by Expanded Cash Income Level, 2016

June 30, 2015
Individual Taxes

T15-0093 - Decrease All Statutory Individual Income Tax Rates by One Percentage Point, Baseline: Current Law, Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2016

June 30, 2015
Individual Taxes: TaxVox

The Uneasy Case for a Financial Transaction Tax

In recent years, there has been a resurgence of interest in an old idea—a financial transaction tax, or FTT. In a new paper , The Tax Policy Center has taken an in-depth look at the pros and cons of the levy. We’ve found that even a modest tax would raise a lot of money, and that it would be quite
June 30, 2015Leonard E. Burman
Federal Budget and Economy: Working paper

Financial Transaction Taxes in Theory and Practice

In response to the financial market crisis and Great Recession, there has been a resurgence of interest in financial transaction taxes (FTTs) around the world. We estimate that a well-designed FTT could raise about $50 billion per year in the United States and would be quite progressive. We discuss
June 30, 2015Leonard E. BurmanWilliam G. GaleSarah GaultBryan KimJames R. NunnsSteven M. Rosenthal
: TaxVox

One more step for equality, and two views on state EITCs

Congress is in recess. The Daily Deduction will return to its regular schedule on Monday, July 6. Wyden promises tax changes in the wake of the Supreme Court’s decision on same-sex marriage. Following the Obergefell v. Hodges decision, senior Senate Finance Committee Democrat Ron Wyden said Friday
June 29, 2015Renu Zaretsky
Individual Taxes: TaxVox

Combined Tax Rates and Creating a 21st Century Social Welfare Budget

In testimony yesterday before a joint hearing of two House subcommittees, I urged Congress to modernize the nation’s social welfare programs to focus on early childhood, quality teachers, more effective work subsidies, and improved neighborhoods. One way lawmakers can shift their gaze is by
June 26, 2015C. Eugene Steuerle
: Daily Deduction

A Ruling, A Guide, and Progressive Taxation

The Affordable Care Act’s tax subsidies are legal in all 50 states. The US Supreme Court issued its ruling yesterday against the plaintiff in King v. Burwell, the case that questioned whether tax subsidies for low- and moderate-income ACA enrollees could be offered in states without their own
June 26, 2015Renu Zaretsky
State and Local Issues: TaxVox

Michigan, out of ideas, might ask poor to pick up transportation tab

Michigan desperately needs more money for transportation. Republican Gov. Rick Snyder called the state’s roads and bridges "rotten" in his State of the State speech. Snyder and the legislature passed a gas tax hike ( Michigan's rate is among the lowest in the country) late last year but needed
June 25, 2015Richard C. Auxier
Federal Budget and Economy: TaxVox

Everything You Should Know about Taxing Carbon

Climate change is hot. From the pope’s encyclical to the upcoming United Nations conference in Paris, leaders are debating how to slow and eventually stop the warming of our planet. We economists think we have an answer: put a price on carbon dioxide and the other gases driving climate change. When
June 25, 2015Donald Marron
: TaxVox

Paying Taxes: Choice and Consequence

Will some private schools lose their tax-exempt status? If religious schools that ban same-sex relationships want to continue to do so, they might have to start paying taxes . If the US Supreme Court rules this month that same-sex marriage is a constitutional right, the IRS could conclude that
June 25, 2015Renu Zaretsky