TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Federal Budget and Economy

Bank Bonus Taxes are a Bad Idea

December 14, 2009 –
The UK recently instituted a 50% tax on bankers' bonuses and France is reportedly about to follow suit. German chancellor, Angela Merkel, is said to like the idea, but would prefer to institute a tax on financial transactions. Even economist Paul Krugman said that, at first blush, the bonus tax "looks entirely reasonable." Sure, it might drive the best and the brightest out of the finance business, but that would be a good thing.
Individual Taxes

It’s Cold. It’s Icy. It’s Tax Extender Time

December 10, 2009 –
One cheer for the House. In what’s become a dreary annual dance, it agreed to extend, for yet another year, 48 special interest tax breaks worth $23 billion in 2010-2011. Why the cheer? At least it is proposing to—sort of-- pay for them.
Individual Taxes

Obama’s Stimulus II

December 8, 2009 –
At Brookings today, President Obama laid out his vision for Stimulus II. At first glance, this seems to be a collection of odds-and-ends, only some of which will help the economy grow and create jobs.
Individual Taxes

Is the CLASS Act a Budget-Buster or a Model New Program?

December 3, 2009 –
Though it has attracted little attention, a bill called the CLASS Act has the potential to fundamentally change the way we think of government social policy. It also runs the risk of becoming yet another costly unfunded entitlement. Congress will decide over the next few months. The Community Living Assistance Services and Supports Act would create a new national voluntary long-term care insurance program to help pay for the personal care of both the frail elderly and younger adults with disabilities. It would provide a basic lifetime cash benefit funded through an optional payroll deduction.
Individual Taxes

Pardon me, but did your credit default swap eat my lunch?

December 3, 2009 –
One arguably good thing about the financial crisis is that it has broadened public understanding of the global financial system. One bit of exotica to grace the front pages of our newspapers is the credit default swap (CDS). These swaps brought insurance giant AIG to its knees, and precipitated a $100 billion U.S. government bailout of the company. More recently, it has been reported that hedge fund manager John Paulson made more than $3 billion using CDSs to bet against subprime mortgages. These things are obviously very powerful.
Individual Taxes

Happy Act: The Poster Puppy for What's Wrong with the Tax Code

December 1, 2009 –
Nothing I have written in more than two years at TaxVox has attracted more attention than my August, 2009 piece on the Happy Act. This bill, sponsored by Representative Thaddeus McCotter (R-MI), would allow people to deduct up to $3,500 from their taxes to subsidize the cost of, no kidding, pet care.
Individual Taxes

Losing Sales Taxes

November 30, 2009 –
On Black Friday, the New York Times published an editorial praising a New York state law requiring on-line retailers to collect applicable state sales tax on all purchases. The requirement, in abeyance pending court challenges, makes a lot of sense. Yet history doesn’t bode well for the new law. And states are likely to continue to lose precious revenue as on-line sales grow.
Individual Taxes

White House Tax Reform Report Delayed Until Next Year

November 30, 2009 –
The White House is delaying the report of its tax reform panel until “after the holidays.” According to a blog posting by top economic adviser Austan Goolsbee, the President's Economic Recovery Advisory Board is delaying the report so it can review new proposals for reform. However, the panel still plans to release only what board chairman Paul Volcker calls “an almanac” of reform ideas. It will not endorse specific proposals or make any recommendations. The report had been due on Friday.
Individual Taxes

State Budgets: Lots of Room on the Trash Heap

November 27, 2009 –
The Pew Center on the States has done a good job documenting the dysfunction in current state budgets. “Beyond California: States in Fiscal Peril” uses both political and short-term economic variables to rank the states. And it shows that while California gets all the attention because its numbers are so big, many states across the country face their own severe financial problems. Some are suffering from bad economic fundamentals (think Michigan). Others are struggling with politics (hello, Arizona).
Individual Taxes

Off to the Big House: Penalizing Non-Buyers of Health Insurance

November 24, 2009 –
“Democrats health bills depend on forcing individuals to buy insurance or face severe fines or imprisonment.” George Will, Nov, 19, 2009 Before we spin off into a Thanksgiving reprise of last summer’s death panel lunacy, let’s be clear. Nothing in Will’s statement is true.