With a budget that encourages consumption rather than savings, the gap between the American Dream and reality will only widen, some at the Tax Policy Center fear. One solution: Rethink those tax subsidies that too often hinder mobility in the name of enhancing it.
By jumping off the fiscal cliff, Congress can magically turn a tax increase into a tax cut. All it has to do is let existing tax cuts expire.
The presidential campaign would like Americans to think the very fate of the country rests on what happens to the Bush tax cuts. But the Congressional Budget Office reminds us there is actually a lot more going on in the economy besides taxes.
It's not impossible for pay for individual tax rate reductions by cutting tax expenditures. But it is very hard. Congress could fix that huge distribution problem by raising tax rates on capital gains and dividends — but it is a very unpopular platform.
Obama had an opportunity to at least tie an extension of the Bush-era tax cuts to tax reform and deficit reduction next year in his address to Congress yesterday. But instead of using his platform to demand such a linkage, Obama offered little more than a rehash of past, unproductive arguments.
The Affordable Care Act’s tax on those who do not have health insurance will be modest and difficult to collect. But will it be enough to get people to buy coverage? If not, healthy people may opt out until they get sick, driving up premiums for those who do buy in.
The Affordable Care Act’s tax was the essential final piece of the Supreme Court’s decision to uphold the law’s constitutionality. But in reality, the tax itself is modest, at least to start. It will affect relatively few people be hard to enforce.
The Supreme Court has ruled that Congress can require people to either have health insurance or pay a tax if they don’t. The political fate of the Affordable Care Act remains to be seen, of course, but at least we know it is constitutional.
Suddenly, the tough budget reform proposed by Alan Simpson and Erskine Bowles is getting a second look. Oh, politicians don’t love the real plan, but they are positively enamored of their own self-edited, stripped-down versions.
The idea of the X Tax–a progressive consumption tax designed 25 years ago–generated lots of discussion among tax experts. Whatever you want to label it, there are so few new ideas in tax policy, it never hurts to revisit an old one.
Republican presidential hopeful Mitt Romney says he wants to cut tax rates, and he wants high-income households to pay the same share of taxes they do today. This first promise is easy to understand. But the second is far more subtle.
While optimists may hang on to the small morsels of agreement between Senator Baucus and Representative Camp's tax reform proposals, in general the dueling plans are opposites, making bipartisan cooperation on the issue seem unlikely.
Over the past week, Bill Clinton, Larry Summers, and Glenn Hubbard have all made the same suggestion: Congress should extend all of the 2001/2003 tax cuts into early next year. It seems like an awful idea.
As a matter of pure tax policy, our tax analyst analyzes the different option on the table. Ideally, Congress should build the best possible tax base and then adjust the rates to meet an agreed-upon revenue target. But in a partisan Congress, few things are 'ideal.'
As a behind-the-scenes debate begins among reformers over just how to fix the US tax code, some Republicans insist that big, broad-based reform would be easier to accomplish, while others in Congress advocate for a more step-by-step process.
What if hitting the statutory debt limit does not happen until sometime in the first quarter of 2013? That is increasingly likely, say the folks who watch this sort of thing. And it would completely change the politics of the coming train wreck.
Tax reform will be difficult, but with a four-step road map, it can be done.
Ever since the U.S. financial crash of 2008 and the beginnings of the pending Euro-zone financial collapse, governments have been debating whether securities transactions should be subject to a new tax. Such a levy would discourage bad behavior in the financial markets, but it could have dire unintended consequences.
Will Obama's public support of marriage equality spill over to financial matters?