TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Individual Taxes

The Health Reform Plan You’ve Never Heard Of

September 8, 2009 –
Before you give up entirely on the idea of health reform, take a look at the Healthy Americans Act, a broad-based reform bill with some interesting tax provisions sponsored by senators Ron Wyden (D-Ore.) and Robert Bennett (R-Utah).
Individual Taxes

Ending the Roth Rollover: Why Stop There?

September 4, 2009 –
Howard Gleckman made a strong case yesterday for repealing the provision that allows unlimited conversions of traditional (deductible) IRAs into Roth accounts beginning next year. Today, Len Burman adds the totally sensible suggestion that Congressional scorekeepers display the present value costs of such provisions, so we’ll know that they cost the government money in the long run despite the short-run revenue pickup in the budget window.
Individual Taxes

Rollover and Play Dead

September 4, 2009 –
Yesterday, Howard explained why the Roth rollover loophole, set to open in 2010, is horrible policy. By pre-paying tax on accumulated IRAs, rich folks can effectively increase their tax-free savings by close to half. (My 2006 article explains this point.) And the rollover option is worth most to people who don’t actually need retirement accounts to finance their old age.
Individual Taxes

The Roth Rollover Boondoggle

September 3, 2009 –
High-income investors are about to enjoy a massive tax windfall from Uncle Sam. In just a few months, they’ll be able to convert their Individual Retirement Accounts--where investment earnings are taxable at withdrawal-- to Roth IRAs-- where they are tax-free. As financial planners are happily telling their big-ticket clients, this will be the gift that keeps on giving.
Federal Budget and Economy

Did the Stimulus Work?

August 27, 2009 –
Alan Auerbach and Bill Gale wrote an interesting new paper that tries to answer an important and timely question: Does fiscal stimulus actually work? Their conclusion: It doesn’t do a bad job at all. In a paper prepared for the Fed’s August 20-22 Jackson Hole conference, Alan and Bill conclude that while the evidence is still a bit dicey, there is a strong case to be made for well-timed tax cuts and spending increases.
Individual Taxes

Trillion Dollar Health Reform, $3 Trillion in Tax Cuts

August 26, 2009 –
It is interesting, and perhaps worth noting, that while political opposition seems to be hardening against the $1 trillion, ten-year cost of the early versions of health reform, barely a peep of concern has been raised about the $3 trillion price tag for President Obama’s plan to extend most of the Bush-era tax cuts.
Federal Budget and Economy

The Budget Numbers that Matter

August 25, 2009 –
Both CBO and OMB put out their updated budget forecasts this morning. Getting past all the confusion about baselines, the news is grim. OMB projects more than $9 trillion in cumulative deficits over the next decade if the President’s agenda is enacted. A few things to keep in mind as you wade through the carnage.
Individual Taxes

Higher Taxes?

August 24, 2009 –
“Most Americans expect higher taxes” When I read that headline on the LA Times website, I first thought that all the warnings about impending fiscal doom had finally struck home. People realize that current trends in taxes and spending cannot continue forever. Their tax bills have to go up. Then I read the sub-head: “Nearly 70% of all Americans surveyed by Gallup say they expect higher taxes by the end of Obama's term.” Oops—it wasn’t the long-run fiscal problems at all.
Individual Taxes

A Holiday from Sales Tax Holidays

August 24, 2009 –
Fall must be right around the corner. TV is filled with back to school ads and states have begun their annual sales tax holidays. These tax respites may have made sense when states were flush. They gave consumers a modest cost break at relatively little expense to government. But today, when state and local treasuries are bare, do governors still want to exempt some sales from tax, even temporarily? These days, consumers are faced with an explicit trade-off, even if politicians won’t admit it: Save a couple of bucks at the checkout counter in return for more cuts in government services or higher other taxes.
Individual Taxes

Brad DeLong’s Modest Proposal

August 20, 2009 –
In his blog today, Brad DeLong argued that TPC had been less influential over the past decade than the liberal Democratic think tank Center for American Progress. Brad's theory is that organizations such as TPC, the Brookings Institution’s Hamilton Project, and the Center for Budget & Policy Priorities have, essentially, been too wimpy to be effective. DeLong thus joins the camp of Paul Krugman (and Rush Limbaugh, Sarah Palin, and Newt Gingrich) in arguing that life in the middle-of-the-road makes you roadkill.