TaxVox: Federal Budget and Economy

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The voices of Tax Policy Center's researchers and staff

Federal Budget and Economy

Why We Run Subsidies through the Tax System

April 19, 2010 –
I disagree with former IRS Commissioner Don Alexander. Sometimes the IRS is the best, most efficient agency to administer a subsidy. And if we want to encourage low-income families to work—a key premise of welfare reform—refundable tax credits make a lot of sense.
Individual Taxes

The VAT Buzz Grows, But What Would It Mean?

April 13, 2010 –
Lots of chatter in Washington about a Value Added Tax. Paul Volcker, the former Fed chairman and gray eminence of the Obama economic team, was talking up the idea the other day. The Congressional Budget Office is looking at the implications of a consumption tax. And Representative Paul Ryan (R-WI) has included one as part of his fiscal Roadmap.
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.
Federal Budget and Economy

Desperately Seeking Revenue: The Panel

March 2, 2010 –
This was my day: I went to the dentist. I spent an hour being interviewed on end-of-life issues. And I listened to four tax experts commiserate about the massive fiscal hole we have dug for ourselves and how we can shovel our way out. I’ve had better. Yet, the Tax Policy Center panel, called Desperately Seeking Revenue, generated more than the usual budget gloom and doom. True, TPC co-director Rosanne Altshuler presented some truly hair-raising projections of the depth of the problem: In sum, she made two points: 1) Unless we act, we will add $11 trillion over the next decade to the national debt, roughly doubling what we already owe. 2) It is not possible, in any reasonable world, to close that gap by hiking income tax rates alone. Thus, the title of both her paper on the subject (written with colleagues Bob Williams and Katherine Lim) and the panel: Desperately Seeking Revenue.
Individual Taxes

Why is the U.S. Olympic Committee Tax-Exempt?

February 26, 2010 –
Watching the made-for-TV Olympics the other night, I could not help but wonder: Why does the federal government subsidize the United States Olympic Committee by granting it tax-exempt status? The question is especially interesting because The Washington Post reports the USOC may soon ask for direct government support.
Federal Budget and Economy

Kucinich Jobs Bill: Lower the Retirement Age

February 24, 2010 –
I know it is risky so early in the year, but I have a nomination for the worst idea of 2010. Representative Dennis Kucinich (D-Ohio), wants to make Social Security retirement benefits available beginning at age 60. Temporarily. To create jobs. His logic appears to be this: If one million people between 60 and 62 (the current age for early Social Security eligibility) retire early, they will open up one million new opportunities for younger people. Somehow, in Kucinich-math, this creates jobs.
Federal Budget and Economy

Dueling Jobs Credits: And the winner is—Obama.

February 18, 2010 –
So far, two tax plans aimed at boosting hiring this year are on the table: one from President Obama and another from senators Chuck Schumer (D-N.Y.) and Orrin Hatch (R-UT). Which would do a better job at increasing employment? I’m betting on Obama’s.
Federal Budget and Economy

Rep. Ryan Responds to Concerns about His Roadmap

February 17, 2010 –
In recent weeks, TaxVox has posted a couple of articles (here and here) that expressed concerns about Representative Paul Ryan's dramatic fiscal plan aimed at balancing the budget and eliminating the national debt by the end of the century. Today, the Wisconsin Republican issued this response.
Federal Budget and Economy

Hints of a Bipartisan Jobs Bill, But Will It Create Jobs?

February 11, 2010 –
Senate Finance Committee Chair Max Baucus (D-MT) and senior Republican Chuck Grassley (R-IA) today proposed a big new jobs bill. The centerpiece of the measure would exempt businesses that hire unemployed workers this year from the employer portion of the Social Security payroll tax.
Federal Budget and Economy

The Ryan Roadmap: Assume a Can Opener II

February 9, 2010 –
I suspect he doesn’t want to hear this, but Representative Paul Ryan’s dramatic proposal to remake the federal budget is the best argument I’ve seen for why tax increases must be part of any serious effort to reduce the federal deficit.