TaxVox

The voices of Tax Policy Center's researchers and staff

Federal Budget and Economy

Obama’s Mind-numbing Budget

February 1, 2010 –
Very little in President Obama’s 2011 budget, released this morning, is new. But the numbers…. Even in Washington, where we throw around trillions of dollars as if they were Hershey’s Kisses at Halloween, these numbers take your breath away. This year, the federal government will spend $3.7 trillion, but will collect only $2.2 trillion. That gap of $1.5 trillion would be equal to more than ten percent of the national’s total economic output.
Individual Taxes

Obama’s Newest Tax Credit: First Houses and Cars, Now Jobs

January 29, 2010 –
To the surprise of nobody, President Obama has proposed new tax subsidies for businesses that hire additional workers by the end of the year. Structured as a payroll tax holiday, the plan would give companies a $5,000 credit against their share of Social Security payroll taxes for each net new hire, plus a “bonus” 6.2 percent credit for real increases in overall wages. Because the subsidy would be capped at $500,000, small business would be the big winner.
Federal Budget and Economy

Obama After a Year: Reality Bites

January 28, 2010 –
The delivery was quintessential Barack Obama, which is to say brilliant, but the words could have been Bill Clinton’s. The lofty principles remain, but the agenda has become pedestrian—constrained by a $1.4 trillion budget deficit and partisan trench warfare where progress is measured in inches and not miles.
Federal Budget and Economy

The Jobs Tax Credit May Be Back

January 27, 2010 –
With Democrats crying for a jobs bill they can bring to voters before the November elections, it looks like President Obama may be about to...
Individual Taxes

Warm thoughts about Obama's freeze

January 27, 2010 –
The president has been attacked from the left and the right for his proposal to freeze non-security discretionary spending. The left feels betrayed that their leader would apply a scalpel (the administration’s term) to favored programs. The right whines that the freeze would amount to a drop in the overflowing bucket of red ink, and the quarter trillion in savings pale in comparison to the $10 trillion in deficits expected over the next decade.
Individual Taxes

Obama, Deficits, Freezes, and Commissions

January 26, 2010 –
It has been an interesting day for us fiscal policy wonks. Over my morning muffin, I digested President Obama’s plan to freeze some domestic spending for the next three years as well as his package of aid to the middle-class. Then, I spent a few hours chewing over the CBO’s latest budget projections. Finally, I watched the Senate trash the bipartisan budget commission.
Individual Taxes

More Childless Workers Should Get the Earned Income Credit.

January 25, 2010 –
The Earned Income Tax Credit (EITC) is the nation’s largest cash assistance program for low-income workers. In 2007, 24.5 million families received $48.5 billion. But while childless families accounted for nearly a quarter of tax units claiming the credit, they got less than three percent of the tax benefits.
Federal Budget and Economy

Not by Income Tax Alone

January 22, 2010 –
Can we fix our budget problem by raising income taxes alone? With deficits as far as the eye can see, Rosanne Altshuler, Katie Lim, and I presented a paper at last week’s TPC/USC budget conference that came up with a fairly straight-forward answer: No.
Individual Taxes

Health Reform: Killing a Plan Bush Might Have Loved

January 21, 2010 –
George Bush could have proposed the Senate health bill. If he had, those Republicans who now loathe the measure would be at the barricades defending it. And those Democrats who backed Obama-care for the past year would have been hoisting their pitchforks and demanding its demise.
Individual Taxes

An Overleveraged Economy: Tax, not just Bank, Reform

January 20, 2010 –
I worry whether the recent hearings with the CEOs of the major Wall Street banks, with their focus on blame and personality, will draw attention away from the more important issue: how we can best insure that money flows from savers to those investors who can produce the highest returns for society. Certainly bank reform is required. But we’ve got a huge problem with bad incentives, and they apply not just to banks, but to other corporations and even to households. These incentives make it possible for corporate managers to make big bucks while running losses, allow households to borrow beyond their means, and permit auto companies to pass highly leveraged auto loans to the government.