TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Federal Budget and Economy

Where’s My Stimulus?

April 27, 2009 –
It’s been more than two months since President Obama signed the American Recovery and Reinvestment Act (ARRA) into law, so where’s the money? Most workers saw a small boost in take-home pay earlier this month, thanks to withholding changes their employers made to implement the Making Work Pay tax credit. Many retirees have received their $250 piece of the stimulus pie. Some people who bought homes this year undoubtedly claimed the $8,000 first-time homebuyers credit on their 2008 tax returns. But most of us will have to wait until we file our 2009 returns next spring to get the rest of the tax bennies.
Individual Taxes

The dreadful dance of tax legislation

April 24, 2009 –
Jan Kinney, Tax Legislative Coordinator at Steptoe & Johnson, LLP, a Washington law firm with a significant tax practice, puts together a very handy daily tax update. When Congress is in session, it includes lists of newly introduced tax legislation. Here’s the list for April 22.
Individual Taxes

Ethanol Subsidies: It's Not Easy Being Green

April 23, 2009 –
It seems TPC has gone green. Len Burman has told us what he thinks of the bike subsidy (not much) and Rosanne Altshuler has struggled to figure out what tax breaks she can get for installing energy efficient windows. Not to be outdone, here is my own contribution: Big tax subsidies to encourage production of ethanol have helped yield two results: They have contributed to an increase of as much as 15 percent in the cost of food, and they have produced no measurable reduction in auto-related greenhouse gas emissions. Oops.
Individual Taxes

Re-cycling stupid tax tricks

April 22, 2009 –
As a bike freak and a tax geek, you’d think that I’d be thrilled about the new tax break for qualified bicycle-commuting reimbursement. I’ve been riding my bike to work for 30 years, so this new tax expenditure has my name written all over it. The biker in me wants to cry out, “It’s about time!” But the tax geek just groans.
Individual Taxes

Goodbye, Gross-Up

April 22, 2009 –
Among the many perks firms offer to their top executives, one of the less well-known is the “gross-up,” cash payments given to cover the tax on other perks such as the use of the corporate jet, club memberships, and golden parachutes. And, of course, the gross-up is itself grossed up to include the tax due on it: each payment generates yet another to cover more tax.
Individual Taxes

Retirement Plans—After the Fall

April 21, 2009 –
When it comes to retirement savings, the recent stock market collapse has surely focused the mind. For years, we embraced the lovely, but ultimately absurd, idea that double-digit returns on equity investments would continue forever. Now, retirees-in-waiting must get their arms around a market that lost half of its value between June, 2008 and March of this year. In this gut-wrenching environment, how should we think about retirement savings? Harvard law professor Dan Halperin, a visiting scholar at TPC, has a provocative solution: He’d dump all tax-advantaged employer-based retirement savings plans and use the money—nearly $100 billion in 2009-- to enhance Social Security.
Federal Budget and Economy

Now that I’ve got your attention

April 20, 2009 –
I was quoted in the New York Times yesterday, which is kind of fun. Many of my friends read the Times, and it’s a great way to make new friends, and enemies.
Federal Budget and Economy

Tax Refund Stimulus?

April 20, 2009 –
Tax Day has come and gone and IRS commissioner Doug Shulman says refunds this year will total roughly $300 billion. About two-thirds of that amount had already gone out to early tax filers by the beginning of this month. That’s a significant amount of money and it could boost the economy—if recipients spend it. In today’s economic environment, that’s a big if.
Individual Taxes

What’s a Green Consumer to Do?

April 17, 2009 –
It’s never too early to plan for next year’s taxes. Let’s say you’re thinking about doing some energy-saving home improvements soon and want to know what federal tax credits are available and how they work. How would you find out? You might try the IRS website. I did but, unfortunately, couldn’t find any information about energy credits for 2009.
Individual Taxes

Is Turbo Tax To Blame for the AMT?

April 16, 2009 –
Commenter dh has raised a provocative question in response to my post the other day about why I hate filing taxes: “I wonder if the use of tax software actually increased the complexity of the tax code. Perhaps the fact that AMT was reaching a large swatch of the population would (have) been addressed sooner if everyone was required to hire an accountant rather than buy a $50 program to figure it out.”