Tax News
Budget Gimmicks Are Alive and Well in the Payroll Tax Cut
The other day, I criticized the unwillingness of Congress to finance the latest extension of the payroll tax cut. Since that blog, the Congressional Budget Office released its estimates of the cost of the entire mini-stimulus, including the so-called "doc fix" and changes in unemployment compensation. And the games were even worse than I feared. [...]
Just How Big is the Payroll Tax Cut?
The 2-percentage-point payroll tax cut extended by Congress in December and again last week will save workers a total of $114 billion this year, according to the Joint Committee on Taxation. Spread over nearly 160 million workers, that's an average tax cut of $714. Yet the typical news report says "the average worker earning $50,000 [...]
Perspectives on Tax Reform from Rudy Penner and Donald Marron
In the current issue of the journal The International Economy, ten economic thinkers shared their views on how best to restructure the tax system. Their opinions crossed the political spectrum, ranging from House Budget Committee Chairman Paul Ryan (R-WI) to the Economic Policy Institute's Andrew Fieldhouse. Two of my Tax Policy Center colleagues--TPC director Donald Marron [...]
President's 2013 Budget Would Enable Almost All Americans to Save for Retirement
The new 2013 budget unveiled by President Obama on Monday again contains the Automatic IRA, which was developed by Brookings’ Retirement Security Project in conjunction with The Heritage Foundation. This year’s version includes an important change that will also encourage more employers to offer a 401(k) account to their workers. However, important changes to the [...]
Congress Figures Out How to Finance a Payroll Tax Cut: Borrow the Money
It looks like Congress is about to assume its default position: In the face of an intractable partisan dispute over how to pay for a government initiative, don't. If Democrats won't cut spending, and Republicans refuse to raise anybody's taxes, there is always the solution they both can agree upon--just borrow the money and increase [...]
How Would the Buffett Rule Affect Marginal Tax Rates?
The Paying a Fair Share Act of 2012 (PFSA) - Congress' first crack at legislating the Buffett rule - would apply a broad-based 30 percent minimum tax for those earning more than $1 million a year. We have a pretty good idea of how this would affect people's taxes: it would substantially raise them but [...]
Raising Revenue in a Progressive Manner Without Raising Tax Rates
Amidst the myriad proposals in President Obama's budget are two “big ideas” that would raise revenue in a progressive manner without raising taxes. These important ideas should be emphasized in the discussion of tax and fiscal reform that the country should be having and will have to have sooner or later. (The President also proposes [...]
Taxes in Obama's Budget: Few Specifics but Some Big Principles
When it comes to taxes, President Obama has proposed what might best be called a conceptual budget--a powerful call for tax reform that is long on principles but, at least when it comes to individual levies, woefully short on specifics. This is understandable with what is effectively a reelection manifesto. In high campaign season, specifics [...]
A Buffett Rule Proposal in Congress
In his State of the Union speech, President Obama's called for a new law that would require high-income people to pay at least 30 percent of their income in taxes. In response, Senator Sheldon Whitehouse (D-RI) and Representative Tammy Baldwin (D-WI) have introduced the Paying a Fair Share Act of 2012, a proposal designed to [...]
Should States Use Tax Breaks to Woo Seniors?
We've all seen the articles in Forbes, Kiplingers, or U.S. News trumpeting the best states to live in retirement. A key measure for them all: Low taxes. What you may not know is that states actively compete with one another to provide tax breaks to older residents--especially to wealthy seniors. This competiton is similar to the way [...]