TaxVox: Individual Taxes

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The voices of Tax Policy Center's researchers and staff

Individual Taxes

Candidates, Marginal Tax Rates, and Economic Welfare

October 1, 2008 –
Typically, TPC measures the impact of tax laws and proposals in terms of average tax rates. This gives a good measure of how taxes affect our pocketbooks, but economists also like to examine how taxes affect economic incentives. For that purpose, the effective marginal tax rate is most apt. That is, how much tax do we pay on an additional dollar of income. This is important because marginal rates affect the incentive to work that extra hour or to engage in tax avoidance.
Individual Taxes

The Bailout and Capital Gains Taxes

September 29, 2008 –
Whatever its ultimate fate, the $700 billion financial market bailout has me thinking about how events of the past few months have fundamentally changed the nature of economic risk in the U.S. And, that, in turn, raises some interesting questions about capital gains taxes.
Federal Budget and Economy

Do the Candidates’ Spending Plans Add Up?

September 29, 2008 –
On Friday morning, I am going to moderate what promises to be an enlightening discussion of the spending plans of the major Presidential candidates. Panelists will be Rudy Penner of The Urban Institute, Jim Horney of the Center on Budget and Policy Priorities, Maya MacGuineas of the Committee for a Responsible Federal Budget, and Bill Hoagland of CIGNA (and formerly the top budget guru for ex-Senate Republican Leader Bill Frist).
Individual Taxes

The Worst Tax Holiday Idea Ever

September 26, 2008 –
We had fun ridiculing the idea of suspending the gasoline tax for the summer, but the gas tax holiday was minor mischief compared with the newest idea for dealing with the financial market meltdown: a two year holiday on capital gains taxes.
Individual Taxes

Tax Credits for Electric Cars

September 26, 2008 –
Earlier this week, both the House and Senate passed measures establishing generous tax credits for electric plug-in cars. The Senate plan gives consumers a credit of up to $7,500 for the purchase of a plug-in car, while the House plan offers consumers a credit of up to $5,000. Under both plans, the value of the credit increases with the battery capacity of the vehicle, meaning that more efficient cars receive larger tax credits.
Individual Taxes

Refundable Health Insurance Tax Credits

September 23, 2008 –
In a previous post, Len Burman reported that a substantial portion of Senator Obama’s non-health tax proposals would be provided as net refunds, over and above income tax liability. This is a key difference from Senator McCain, whose proposals would mostly benefit taxpayers (and mostly those with high incomes).
Federal Budget and Economy

The Bailout and the Next President: Getting Real

September 23, 2008 –
Barack Obama and John McCain are slowly beginning to get it: For the next President, this week’s financial market meltdown has changed everything. Suddenly, their grandiose promises of new tax cuts and ambitious spending are sounding more hollow than ever. An $11.3 trillion national debt will do that to you every time.
Federal Budget and Economy

The Blank Check Bailout

September 22, 2008 –
The Bush Administration has asked Congress to write the biggest blank check in the history of the planet. And Congress may very well do it. The Administration’s proposal requires only semi-annual reports to congressional committees and explicitly exempts any bailout-related actions from judicial review. This has a whiff of the war on terror about it. “We are in a crisis,” the Administration cries, “and you must act now. Do not stop and think. Do not amend. Just approve what we say or we will blame you for what happens next.”
Federal Budget and Economy

Bad Markets and Deficits

September 18, 2008 –
Crumbling financial markets mean more awful news for governments already reeling from an economic slowdown and mortgage foreclosures. The only glimmer of optimism is that the sluggish revenues and rising spending that are around the corner should only be transitory. Assuming the markets and the economy rebound, these fiscal shocks will be a fading memory after a few years.
Individual Taxes

AIG: Ben Blinked

September 17, 2008 –
Just when we thought the bailouts were over, just when Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson insisted failing financial institutions would, like Lehman Brothers, sink or swim on their own, along comes AIG. Make no mistake, the Wall Street financiers called Bernanke and Paulson’s bluff. After the two men said Washington would not throw taxpayer money into the AIG pot, the big money guys went all in, insisting they would not rescue the rapidly-sinking financial services giant without cash from Washington.