Federal Budget and Economy: TaxVox

The Tax Vox Lump of Coal Awards: The 10 Worst Tax Ideas of 2014

It’s time for the annual Tax Vox Lump of Coal Awards for the worst tax policy of 2014. The past 12 months were a banner year for bad ideas and their perpetrators. The Top 10 are: Frank Underwood & Elvis. Tax subsidies for economic development hardly ever pay for themselves. But two are worthy
December 23, 2014Howard Gleckman
Campaigns, Proposals, and Reforms: TaxVox

Tax Policy in 2014: Two Developments That May Set The Table For the Future

At first glance, 2014 seemed like a tax policy wasteland, but two developments may have set the stage for important future initiatives. A wave of tax-driven corporate inversions showed one reason why tax reform is necessary. A detailed plan by House Ways & Means Committee chairman Dave Camp (R-
December 22, 2014William G. Gale
: Daily Deduction

Holiday Wishes for… Tax Reform

Congress is adjourned. The Daily Deduction will appear Mondays until it reconvenes. What might the White House tax reform plan look like? We may find out soon. President Obama says he will soon present some “pretty specific proposals” to revamp the US tax code in the new Congress. His plan will
December 22, 2014Renu Zaretsky
Individual Taxes: Journal Article

Changes in Income Reported On Federal Tax Returns

The composition of reported income has changed markedly since 1952. Investment income has continued to grow, along with business income, interrupted only by periodic economic downturns. Meanwhile, salaries and wages have declined as a share of income.
December 22, 2014Roberton C. WilliamsLydia Austin
Federal Budget and Economy: TaxVox

Magical Thinking on Tax Reform

Everybody loves the idea of tax reform. And tax reform can be very good policy. But advocates often turn to magical thinking about how good tax reform can be, and a recent column by George Will offers two examples of this problem. First, Will writes that “if America’s long-term economic growth [
December 18, 2014William G. Gale
Campaigns, Proposals, and Reforms: TaxVox

Clip ‘N Save: Orrin Hatch’s Tax Reform Principles

In a few weeks, veteran Utah Republican Orrin Hatch will become chair of the Senate Finance Committee. Soon after, the panel may begin tackling tax reform. While there is good reason to be skeptical about how far a tax code rewrite will get in the next Congress, it is worth keeping track of Hatch’s
December 18, 2014Howard Gleckman
: TaxVox

They Saved the Must-Pass for Last

Congress has adjourned. The Daily Deduction will post on Mondays until the 114th Congress convenes. Expired tax breaks: Renewed for 2014. Last night the Senate passed a $42 billion package of expired tax breaks by a vote of 76-16 . In two weeks' time, the tax breaks will expire. Again. Senate
December 17, 2014Renu Zaretsky
Federal Budget and Economy: TaxVox

The War on the IRS

The massive 2015 spending bill that President Obama is likely to sign this week continues an ongoing effort to trash the Internal Revenue Service. It is a cynical recipe for a self-fulfilling disaster: Give the agency more and more work. Cut its budget. Blame it for failing to do its job. Repeat.
December 16, 2014Howard Gleckman
: TaxVox

The Senate Keeps Working...

Still on deck in the Senate: It is expected this week to renew dozens of expired tax breaks, including tax cuts for business research, wind power, and foreign profits. It’s worth remembering that if a $42 billion package like this gets passed every year , the federal deficit could grow by $800
December 16, 2014Renu Zaretsky
: TaxVox

“They Said That They Would Do It and Indeed They Did.” 


“ Oh, what a night …” but no shut down. Ted Cruz and a handful of allies succeeded in delaying the Senate vote on the 2015 budget, but they couldn’t stop it. The $1.1 trillion spending bill was approved late Saturday night by a vote of 56-40 . And three months into the fiscal year, most of the
December 15, 2014Renu Zaretsky
Federal Budget and Economy: TaxVox

Will Immigrants Get A Tax Windfall From Refundable Credits?

In the end-of-the-year congressional scramble, lawmakers scuttled an effort to permanently extend a number of tax breaks—largely because many feared it would open the door to widespread use of refundable tax credits by undocumented immigrants covered by President Obama’s recent executive order. But
December 12, 2014Elaine Maag
: TaxVox

Everybody’s Working for the Weekend

No shutdown, so far . Democrats hated it because of riders weakening Dodd-Frank financial protections and allowing fat-cats to triple their donations to political parties. Republicans hated it because it didn’t stop President Obama from liberalizing immigration laws. But, in the end, the House
December 12, 2014Renu Zaretsky
Individual Taxes: Brief

Net Capital Gains Across Zip Codes

This brief examines net capital gains realizations by utilizing zip-code level data on taxes and demographics. This data can help shed light on direct beneficiaries of preferential capital gains tax rates beyond the standard distributional tables based solely on income. In particular, this brief
December 12, 2014Benjamin H. HarrisLucie Parker
Individual Taxes: Brief

Factsheet: Beneficiaries of Tax Expenditures Across Zip Codes

This fact sheet summarizes the key conclusions from a series of briefs aimed at contributing to the knowledge of select tax expenditures—the EITC, MID, and preferential rates on capital gains—by analyzing zip code-level tax data. In particular, the goal of the research was to better characterize
December 12, 2014Benjamin H. HarrisAurite Werman
Business Taxes

Are U.S. Corporations Really Over-Taxed?

Corporate tax reform is one of the principal areas in which there may be an opportunity for the two parties to cooperate in the new session of Congress. Many policymakers are concerned about how the high statutory corporate income tax rate and U.S. rules for taxing foreign-source income affect the
December 11, 2014
Federal Budget and Economy: TaxVox

Kudos to Sandy Levin For Speaking Out For Fiscal Responsibility

Rep. Sandy Levin (D-MI), the senior Democrat on the House Ways & Means Committee, stood up on the House floor yesterday and urged Congress to refuse to make permanent three special tax breaks for charitable giving unless their $11 billion cost was paid for. Why were his remarks notable? Because
December 11, 2014Howard Gleckman
: TaxVox

No Congressional Approval of a Spending Deal Yet, But Plenty of Commotion

In the spending bill, inversion curbs could be curbed. The bill to fund the government through September 2015, scheduled for a House vote today and a Senate vote after that, waters down Democratic-supported curbs on corporate inversions. The Ds would have barred companies that move their tax
December 11, 2014Renu Zaretsky
Individual Taxes: TaxVox

A Repatriation Tax Holiday for US Multinationals? Four Contagious Illusions

U.S.-based multinationals hold $2.1 trillion in foreign cash and insist that the only way they can feasibly bring that money back home is if Congress grants them a tax holiday—an idea that even President Obama now appears to support. But the argument they (and the President) are making for a
December 10, 2014Chris Sanchirico
: TaxVox

Last Minute, or Second- or Third-to-Last Minute, Deals Before the Holidays

Congress blows yet another budget deadline . After missing its chance to approve a spending bill to keep the government running after Thursday, Congress is now planning to vote this week on a very short-term continuing resolution —one good for just a few days. The measure is designed to keep the
December 10, 2014Renu Zaretsky
Federal Budget and Economy: TaxVox

Why Does Congress Pay For Some Tax Cuts and Not Others?

Can somebody explain to me why the House agreed last week to restore 50+ tax subsidies without paying for them (and thus adding $42 billion to the deficit) and 10 minutes later approved a new tax subsidy that it insisted on paying for? It can’t be the merits of the recipients. By now, TaxVox
December 9, 2014Howard Gleckman
Individual Taxes: TaxVox

Don’t Count the Feds Out Yet

In a provocative Washington Post column , Brookings Institution scholar Bruce Katz argues that the federal government is becoming irrelevant — especially to cities and regions where most Americans live and most economic activity takes place. While Bruce rightly identifies some areas where the feds
December 9, 2014Tracy Gordon
: TaxVox

Hits or Misses in Budgets and Courts?

News from the Hill: A compromise $1.1 trillion spending bill is expected to be released today. The House is scheduled to vote on the bill tomorrow and then adjourn for the year. The Senate will likely vote on Thursday, just hours before the December 11 deadline. The package will fund most of the
December 9, 2014Renu Zaretsky
: TaxVox

Congress Ties Up Loose Ends, Loosely

The Senate may soon send that retroactive tax-break bill to the President. The House passed it last week, and the Senate is expected to take up the measure this week. The House version would revive 50+ expired tax breaks only through the end of 2014. Tax Analysts reports that Dave Reichert, the
December 8, 2014Renu Zaretsky
Campaigns, Proposals, and Reforms: TaxVox

The Lee-Rubio Family-Friendly Tax Is a Disappointment

Tax reform is in the air and in an effort to make it more family-friendly, Senator Lee has introduced a bill, the Family Fairness and Opportunity Tax Reform Act. Senator Rubio is a supporter as well. The bill broadens the tax base by eliminating many itemized deductions; but instead of using the
December 7, 2014Isabel V. Sawhill
: TaxVox

Congress May Just “Let It Go” … Until Next Year

Congress might really be home for the holidays. Finance Committee Chairman Ron Wyden told reporters today that the Senate won’t amend the House-approved bill to revive over 50 expired tax breaks for 2014 only. An up-or-down Senate vote could be held within days. Lawmakers must still sort out what
December 5, 2014Renu Zaretsky