TaxVox

The voices of Tax Policy Center's researchers and staff

Individual Taxes

Political Nominees and Taxes: Some Other Views

February 4, 2009 –
Not everyone, it seems, agrees with my assessment of the failure of the Obama Three to properly pay their taxes. I argued that they were among millions of us who got their returns wrong. Others, however, feel they should have known better. From Paul Caron, the esteemed blogger at TaxProf: "These are not rocket-science kinds of tax issues. I take them at their word, but on the other hand, these were not cases of something really esoteric."
Federal Budget and Economy

Stimulating the Stimulus—child credit and EITC

February 4, 2009 –
The stimulus bill working its way through Congress would make both the child tax credit (CTC) and the earned income tax credit (EITC) available to more low-income workers. The CTC would phase in at lower income levels for the poorest working families, raising after-tax income for the neediest and most likely encouraging them to spend additional income. The EITC would increase for larger families, also giving more cash to families likely to spend quickly.
Individual Taxes

Are We All Tax Cheats?

February 3, 2009 –
In the wake of the tax misadventures of Obama nominees Tim Geithner, Tom Daschle, and Nancy Killefer, the question is, “Can’t anyone inside the Beltway get their taxes right?" Sadly, the answer is, “No, they can’t. And neither can the rest of us.”
Individual Taxes

Hitching a Ride on the Stimulus Train

January 29, 2009 –
This will surprise nobody who follows what is optimistically called the budget process, but the economic stimulus package wending its way through Congress has become the vehicle for an astonishing array of stuff. It’s become even better than emergency supplemental appropriations, which have been used to fund decidedly predictable items, like the decennial census and continuing outlays for the Iraq war (long after the initial shock and awe had worn off).
Federal Budget and Economy

It is About Credit Markets, Not Just Stimulus

January 27, 2009 –
Washington has kicked off a perfectly predictable donnybrook over stimulus. Democrats, who spent the past eight years bashing George Bush for turning a Clinton-era surplus into a big deficit, are now defending what will be nearly $1 trillion in new tax cuts and spending. Republicans, who presided over decades of deficits, suddenly are worried about the debt we are leaving to our grandchildren.
Federal Budget and Economy

Grading the Stimulus

January 26, 2009 –
My TPC colleagues—most having taught at some point in their careers—couldn’t resist. They’ve given grades to the major tax provisions of the stimulus bill now working its way through Congress. While you can argue over the specific grades (and we surely did), the benefit of this exercise is that it forces you to look at the relative value of each of the elements of the plan. For a first pass, TPC graded the Ways & Means bill, and concluded that the best proposals of the bunch are those that give temporary tax relief to low-income families. It makes sense, since they are the most likely to spend the money they receive. As I noted in a recent post, even these are far from perfect, but they should help to get the struggling economy get back on its feet.
Individual Taxes

Will the Tax Cuts Help Fix the Economy?

January 22, 2009 –
How much will the $300 billion in tax cuts approved today by the House Ways & Means Committee really stimulate the economy? They will help some, but don’t expect them to accomplish a lot. I’d give the overall plan a Gentleman’s C. Some provisions would channel money to low-income people most likely to spend it, but deliver the cash too slowly. Others distribute the funds relatively quickly, but give an awful lot to wealthier taxpayers who are least likely to spend it.
Federal Budget and Economy

Will Obama “Bend the Curve” on Entitlement Spending?

January 19, 2009 –
I am sure Barack Obama will deliver a stirring Inaugural address tomorrow. However, Obama’s most important remarks since his election came in an interview the other day with The Washington Post. There, he promised to convene a bipartisan fiscal summit in February. This has the potential to be the most important step of his Presidency. Yes, at least as important as fixing the immediate economic mess.
Individual Taxes

Tax Forms, Complexity, and Tim Geithner

January 16, 2009 –
People often measure our tax system’s complexity by counting tax forms as if the documents, not the law, are the culprit. But my former IRS colleagues used to remind me that forms actually help taxpayers. Imagine if people were required to read the Internal Revenue Code to figure out how much they owe. This truism leapt to mind when I read about Treasury Secretary-designate Tim Geithner’s tax problems. While employed at the IMF, Geithner failed to report liability for about $34,000 in payroll taxes. After the IRS audited his 2003 and 2004 returns, he paid the back taxes with interest. Recently, he also remitted payroll taxes for 2001 and 2002, even though by then the statute of limitations had expired.
Federal Budget and Economy

Stimulus: Something for Everyone

January 15, 2009 –
The stimulus plan unveiled by House Democrats today includes a little something for everyone. With an eye-popping price tag of $825 billion, I suppose it should. The plan, written in close consultation with the incoming Obama Administration, includes $275 billion in business and individual tax cuts, and $550 billion in direct spending for everything from smart appliances to repairing hiking trails in national parks. A huge chunk—roughly half—would be direct assistance to state and local governments.