The voices of Tax Policy Center's researchers and staff
Paul Ryan and Orrin Hatch want businesses to share ideas on tax treatment of “pass-throughs.” As owners of pass-through businesses such as partnerships and sole proprietorships, millions of business owners pay their firms’ income taxes through the individual code. Both the GOP and the White House say they’d cut the 35 percent corporate rate, but the White House balks at individual rate cuts. Where does that leave 34.6 million pass-throughs? House Ways & Means Chair Paul Ryan and Senate Finance Committee Chair Orrin Hatch have asked business groups how to reduce pass-throughs’ effective tax rates without lowering individual rates. Their deadline is May 31.
The Senate may vote on the Medicare “doc fix” today. The $200 billion Medicare deal passed by the House before the spring recess is expected to hit the Senate floor today. Included: The doc fix that would end Medicare’s sustainable growth rate and prevent big reimbursement cuts for doctors. The fix would cost roughly $141 billion over ten years.
Maybe a Missouri state lawmaker didn’t go far enough? TPC’s Bob Williams considers GOP Missouri Representative Rick Brattin’s plan to limit the use of food stamp benefits. Bob has a modest proposal: Why not limit use of all federal benefits including tax subsidies? Maybe “people getting a tax break on their mortgages should settle for a tract home no larger than 1,500 square feet with one bathroom and no garage.” Sound reasonable? Bob doesn’t think so, either.
In honor of Tax Day… The Peter G. Peterson Foundation has a new video explaining, in just under four minutes, the “Tax Reform Opportunity” to simplify the tax code to enhance fairness and promote economic growth.
Tax Day honors of a sort on the Hill, too. The House plans to vote on 11 tax bills this week, including one to repeal the estate tax, which would cut revenue by $269 billion over ten years. Another would allow itemizers to deduct state and local sales taxes in lieu of state income taxes from their federal returns. Tax Analysts reports that House majority leader Kevin McCarthy said votes on those two bills “will not bust the budget nor complicate tax reform efforts.”
Are you really down to the wire on your taxes, or simply curious about tax forms? Check out TPC’s interactive 2014 Form 1040 and Schedule A, where taxpayers tally up itemized deductions. The biggest change since last year: Three new lines related to the Affordable Care Act. They reconcile subsidies used to purchase health insurance on the federal or state exchanges or collect penalties for not buying health insurance.
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