Federal Budget and Economy: TaxVox

A Permanent Slowdown In Health Care Spending Growth Would Ease, But Not End, the Fiscal Problem

Rapidly growing health care costs have been a major driver of actual and projected federal budget deficits and the national debt. In recent years, the rate of growth in medical spending has slowed, leading many to ask whether a permanent decline could solve the nation’s long-term fiscal problem.
May 5, 2014William G. Gale
: Daily Deduction

A Tax News Update in Three Acts, and an Encore

Act 1: Some Pennsylvania school districts may need to raise taxes this year. In setting their budgets for the coming year, nearly 1/3 of school districts (164 out of 497) sought and received exceptions to Act 1 , a state law that limits how much districts can raise property taxes without voter
May 5, 2014Renu Zaretsky
: Daily Deduction

Tax Impacts: Health Insurance, Housing, Prisons, and Expirations

Tax subsidies for health and housing top $600 billion in 2014. The latest Tax Facts from TPC’s Georgia Ivsin and Donald Marron reports that tax expenditures will top $1.4 trillion in fiscal year 2014. About $640 billion, or more than 40 percent, subsidize health (mostly employer-sponsored insurance
May 2, 2014Renu Zaretsky
Individual Taxes: TaxVox

The Tax Extenders: Yes, Virginia, They Really Are Tax Cuts

The other day, the House Ways & Means Committee voted to cut taxes for certain businesses by $310 billion. Washington, being Washington, is now in the midst of a partisan debate over whether this is in fact a tax cut or, conversely, whether failing to cut those business levies would be a tax
May 1, 2014Howard Gleckman
: Daily Deduction

Competition and Tax Reform: A Thorn in Everybody’s Side

Running abroad like they’re being chased? Officials are making it known that the Treasury would like to crack down on US companies that change their address in order to lower tax bills. Corporations might speed up these tax-motivated inversions in advance of any changes to tax rules. Firms argue
May 1, 2014Renu Zaretsky
Individual Taxes: Research report

Adding Employer Contributions to Health Insurance to Social Security's Earnings and Tax Base

Including employer-sponsored health insurance (ESI) in taxable compensation would increase income and payroll tax receipts, but would also increase Old Age, Survivors, and Disability Insurance (OASDI) benefits by adding ESI to the OASDI earnings base. The increased present value of OASDI benefits
May 1, 2014Karen E. SmithEric Toder
Federal Budget and Economy: Research report

Tax Subsidies for Health and Housing Top $600 Billion

Tax expenditures will cost more than $1.4 trillion in fiscal year 2014. Those that support health and housing policies account for more than 40 percent of this number, or about $640 billion. These figures and their accompanying table are calculations derived from the tax expenditure estimates in
May 1, 2014Georgia IvsinDonald Marron
: Daily Deduction

Funding Tax Breaks, the IRS, and Public Pensions, Safety, and Schools

Six business tax breaks move ahead. The House Ways and Means Committee has approved by a largely party-line vote $310 billion in business tax breaks, overcoming a partisan dispute over how and whether to offset their cost. The measure would permanently restore some of the 50+ provisions that
April 30, 2014Renu Zaretsky
Federal Budget and Economy

T14-0026 - 21st Century Worker Tax Cut Act: Allow Deduction for Dual-Earner Families and Expand Childless Earned Income Tax Credit; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Level, 2015

Distribution of federal tax change from Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income level, 2015.
April 29, 2014
Federal Budget and Economy

T14-0027 - 21st Century Worker Tax Cut Act: Allow Deduction for Dual-Earner Families and Expand Childless Earned Income Tax Credit; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2015

Distribution of federal tax change from Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income percentile, 2015.
April 29, 2014
Federal Budget and Economy

T14-0028 - 21st Century Worker Tax Cut Act: Deduction for Dual-Earner Families; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Level, 2015

Distribution of federal tax change from dual earner deduction provision in Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income level, 2015.
April 29, 2014
Federal Budget and Economy

T14-0029 - 21st Century Worker Tax Cut Act: Deduction for Dual-Earner Families; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2015

Distribution of federal tax change from dual earner deduction provision in Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income percentile, 2015.
April 29, 2014
Federal Budget and Economy

T14-0030 - 21st Century Worker Tax Cut Act: Expand Childless Earned Income Tax Credit; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Level, 2015

Distribution of federal tax change from provision to expand the earned income tax credit for tax units without qualifying children in Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income level, 2015.
April 29, 2014
Federal Budget and Economy

T14-0031 - 21st Century Worker Tax Cut Act: Expand Childless Earned Income Tax Credit; Baseline: Current Law; Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2015

Distribution of federal tax change from provision to expand the earned income tax credit for tax units without qualifying children in Sen. Patty Murray (D-WA)'s tax reform plan, the 21st Century Worker Tax Cut Act, by expanded cash income percentile, 2015.
April 29, 2014
State and Local Issues: TaxVox

Retailers That Collect Online Sales Tax Lose Business

Online retailers have argued for years that they’ll lose business if they have to collect sales taxes on their online transactions. A new study by three researchers at Ohio State finds they are right. Paradoxically, the study may increase support by some online sellers for federal legislation to
April 29, 2014Howard Gleckman
: Daily Deduction

Rebates, Winnings, Losses and Mergers

Connecticut taxpayers won’t see a rebate after all. Despite Democratic Governor Dannel Malloy’s re-election year hopes, state revenues will not likely be available for a $55-per-person rebate or a supplemental payment to the state employees’ pension fund. As a result of lower-than-expected tax
April 29, 2014Renu Zaretsky
: Daily Deduction

Tax Shelters, Tax Fights, and One Way to Reform a Zombie

Ways & Means gets to work on tax “extenders.” On Tuesday, the panel is expected to begin marking up a measure to restore dozens of tax breaks that expired last December. On the plate for the first session: the research and experimentation credit and a provision allowing firms to take full first
April 28, 2014Renu Zaretsky
Individual Taxes: TaxVox

Len Burman’s Brief for a Health Care VAT

In the cover essay in the current issue of The Milken Institute Review , Len Burman calls for a Value-Added Tax (VAT) to pay for government health care costs. Len, the director of Tax Policy Center (and, thus, my boss), argues that a dedicated—and fully transparent--health care VAT would increase
April 24, 2014Howard Gleckman
Campaigns, Proposals, and Reforms: TaxVox

Dave Camp’s Tax Reform Could Kill Community Foundations

House Ways and Means Committee Chair Dave Camp deserves credit for proposing a tax reform that takes on many special interests, something too few other elected officials are willing to do. But one provision mistakenly threatens the survival of most community foundations without improving the tax
April 24, 2014C. Eugene Steuerle
Campaigns, Proposals, and Reforms: Research report

The Tax Reform That Just Won't Die and Shouldn't

This paper provides an historical overview of tax reform with an eye toward identifying conditions that would make successful reform plausible in the near future. Burman begins by analyzing the environment that led to tax reform in 1986 and posits that successful reform would require strong
April 24, 2014Leonard E. Burman
Campaigns, Proposals, and Reforms: TaxVox

Should Congress Curb Donor Advised Funds?

Buried deep in House Ways & Means Committee Chair Dave Camp’s tax reform plan is a proposal to require donor-advised funds to distribute contributions within five years. The proposal would be a major change for these charitable vehicles, where funds currently can sit indefinitely. Donor-advised
April 22, 2014Howard Gleckman
Individual Taxes: IndividualCurrent Statistics

Projected Returns by Type of Tax 2011-2018

April 21, 2014
: Daily Deduction

Sales Tax Revenues, State Economies, Lotteries and Fairness

Congress is in recess and returns next week. The Daily Deduction comes to you today, and will resume its regular schedule on Monday, April 28. A penny for your roads in the Show Me State. Missouri may increase its sales tax by one cent to fund transportation projects. A constitutional amendment
April 21, 2014Renu Zaretsky
Individual Taxes: TaxVox

A Flash Tax for the Flash Boys

Michael Lewis spotlights high-frequency traders with his new book, Flash Boys . These traders use high-speed computers and fast connections to outrace investors, and other traders, to the market. They now account for more than half of all U.S. stock trades. And the flash boys spend billions to save
April 18, 2014Steven M. Rosenthal
Individual Taxes: TaxVox

If Congress Lets Firms Expense Investments, It Should Take Away Their Interest Deduction

Egged on by business lobbyists, congressional tax writers seem increasingly interested in allowing firms to rapidly write off the cost of their capital investments. Especially in the House, lawmakers would allow small businesses to expense the full cost of their investments in the year they are
April 17, 2014Howard Gleckman