TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Individual Taxes

The Other Individual Mandate: Tax Prep

March 30, 2010 –
Where, as they say, is the outrage? For all of the indignation over the new health insurance mandate, I am amazed at the serenity at which we accept another (near) mandate: That we must pay somebody to help us do our taxes. The government does not specifically require us to hire paid tax preparers or buy commercial software, of course. But it has, in effect, left millions of taxpayers with no real choice. Congress has created a tax code that makes it nearly impossible for many Americans to file returns without paid help. And even those who could (most non-itemizers for instance) are so intimidated by the whole process that they pay people to help them anyway.
Individual Taxes

The Individual Health Insurance Mandate and Taxes

March 25, 2010 –
One day soon, I would like to walk into my neighborhood supermarket, load up my cart with goodies and walk out the door. When I’m confronted by security about the matter of paying for the stuff, I’ll just tell them to make everyone else in the store pick up the tab. If I lived in Virginia, I’d tell ‘em to go see Attorney General Ken Cuccinelli, who says I don’t have to pay.
Individual Taxes

Health and Taxes

March 22, 2010 –
Health reform is (almost) law. And while the Senate must still agree to a package of technical fixes approved by the House late last night, we now can see historic changes in the way we will buy health insurance. We can also see big new tax increases, at least for some relatively high-income people. But the most important won’t take effect for years. And there’s the rub.
Individual Taxes

Where are the profits, and why?

March 18, 2010 –
Marty Sullivan of Tax Notes magazine has documented the location of profits of U.S. pharmaceutical companies for years. Each article he writes contains eye-popping figures. Last week’s was no different. In the March 8 issue, Marty used annual reports to chart the before-tax profits of seven large U.S. drug companies over the last decade or so. Here’s the story: between 1997 and 2008, foreign profits of Abbot Laboratories, Bristol-Myers Squibb, Eli Lilly, Johnson & Johnson, Merck, Pfizer, and Scherling-Plough quadrupled from about $9 billion to $37 billion. Over the same period, their U.S. profits fell by a third from $17 billion to $11 billion. Bottom line: the share of U.S. pharmaceuticals’ profits earned abroad has grown dramatically—from about one-third in the late 1990s to nearly four-fifths in 2008.
Individual Taxes

Charitable Giving When Filing Your Tax Return

March 17, 2010 –
I recently reprised my long-standing suggestion to allow taxpayers to deduct charitable gifts made before April 15 on the previous tax year’s tax return. Congress provided the new impetus for this type of proposal by allowing taxpayers to deduct charitable gifts for Haiti relief on 2009 tax returns, even though they were paid in January and February of 2010. It offered a similar proposal in 2005 for donations to tsunami victims. I predicted that Congress would likely accelerate offerings of these one-off accelerated deductions now that precedent was becoming well established.
Individual Taxes

Government Spends Too Much on Senior Health, But So Do Seniors

March 16, 2010 –
Here is why we need to control the growth of medical costs: A typical couple retiring this year can expect to receive the equivalent of nearly $400,000 in government Medicare benefits before they die. Yet, they would still have to pay an average of an additional $200,000 in out-of-pocket medical costs. I’ll say it again: A 65-year old couple will likely spend $200,000 (in present value) of their own money, even after they get their Medicare benefits.
Individual Taxes

Obama’s Medicare UnPayroll Tax

March 11, 2010 –
President Obama’s proposal to boost the Medicare tax is a key element of the compromise health bill that looks increasingly as if it is going to become law. The Joint Committee on Taxation estimates it would generate over $180 billion over the next decade. And exactly as intended, the tax increase would fall almost entirely on the top 1 percent of taxpayers, according to a new analysis by my Tax Policy Center colleagues.
Individual Taxes

Ryan Responds to TPC's Analysis of his Roadmap

March 10, 2010 –
Representative Paul Ryan (R-WI) has responded to the Tax Policy Center's analysis of the revenue portion of his Roadmap for America's Future. TPC found Ryan's major tax restructuring would likely raise significantly less revenue than he expected and would substantially lower taxes for high-earners. In his response, Ryan suggests he'd be willing to adjust his plan to hit his revenue target of 19 percent of Gross Domestic Product. Here is his response:
Federal Budget and Economy

Rep. Ryan’s Tax Roadmap Falls Short of His Revenue Goals

March 9, 2010 –
In his provocative Roadmap for America’s Future, Representative Paul Ryan (R-WI) figures that his broad tax code overhaul would eventually generate about 19 percent of Gross Domestic Product in revenues. But the Ryan plan would produce hundreds of billions of dollars-a-year less than that—about 16.8 percent of GDP—a decade from now, according to new Tax Policy Center estimates. Moreover, the plan would give a huge tax cut to the wealthy, while cutting taxes by little or nothing (and in some cases even raising taxes) for low- and middle-income people.
Individual Taxes

Stimulus Expectations Meet Reality

March 8, 2010 –
As Congress debates the latest fiscal stimulus bill, commentators have been debating the effectiveness of the previous one. Much of this debate has focused on funds flowing through state capitals, cities, and towns. Depending on whom you ask, these funds have been a critical lifeline or a colossal waste of money. Both views are probably overblown. Last year’s stimulus worked pretty much like previous efforts to boost the economy through state and local governments.