Tax Expenditures

Making Tax Day Less Painful (The Washington Times)

. . . Maya MacGuineas of the Committee for a Responsible Federal Budget says that these $800 billion a year in "tax expenditures are really spending programs designed to look like tax cuts." . . . more

The Social Security payroll tax hurts working Americans -- and it’s getting worse. Because the tax (a flat levy of 15.3 percent, combining the nominal employer portion with the nominal employee portion) applies to income only up to $97,500 (with a scheduled increase to $102,000 this year), it is inherently, grossly regressive, falling far more heavily on working Americans than on the rich. At the same time, as a result of rising pre-tax wage inequality, the payroll tax system is… more

While tax season tests our technical tax knowledge daily, here is an opportunity to take a break and test your knowledge about our federal tax system.

Answers to this quiz can be found at the bottom of this article.

Questions IRS tax revenue collections for fiscal year 2006 were approximately $______ trillion. The individual income tax was the largest portion of these tax collections, representing ___% of the total. For 2005, _____ million individual tax returns were filed… more

The current crop of Presidential candidates sound a lot like they did in prior years with promises of new targeted tax breaks, loophole closures, increased taxes on the rich and new spending programs. Have the candidates not read the doom and gloom budget reports from the Government Accountability Office (GAO), Congressional Budget Office (CBO) and others?

The fiscal agenda for the next President and Congress must include some very difficult decisions that go beyond just tweaking the tax system. Below,… more

Gov. Arnold Schwarzenegger's diagnosis of California's $14.5 billion budget shortfall: a "spending problem." His remedy: 10 percent across-the-board spending cuts. What about a second opinion?

A spending problem is a chronic condition that warrants more than unfocused across-the-board cuts. Eliminating unnecessary spending would be a more reasonable and lasting treatment. The first step is identifying that wasteful spending -- not always an easy task. The task is made even trickier when some of it is hidden in our tax laws. Removing… more

No doubt, taxes are complicated. A good example of this complexity is the Alternative Minimum Tax or AMT which is part of our income tax. This is a flawed tax that ignores principles of good tax policy and generates revenue beyond expectation. While Congress is currently trying to keep millions of individuals from paying AMT in 2007, outright repeal would be best.

The income tax has always had "preferences" that reduce one's tax bill. Today these include deductions for dependents,… more

On October 25, 2007, House Ways and Means Committee Chair Charles Rangel introduced H.R. 3970 (text, summary (PDF)), the Tax Reduction and Reform Act of 2007, a bill he informally calls the “mother of all tax reforms.” Based on what we have learned from the last major reform effort -- the Tax Reform Act of 1986, are we likely to see H.R. 3970 enacted?

Strategy

Briefly described below are actions and techniques that can improve the chances… more

In August of 1994, with the prospects of health reform all but vanishing, Sen. Robert Bennett (R-UT) stood on the Senate floor and asked three fair questions: Why have we talked so much about insurance and health care instead of better health? Why have we not adequately explored what role markets can and cannot play in health care reform? And why do we fail to recognize that when employers or governments spend money on health care it is… more

If you start to read the policy proposals of the Democratic presidential candidates and the mainstream Democratic think tanks, you will quickly get the impression that, while Democrats see lots of problems, there’s always just one solution: a tax credit.

John Edwards proposes an "American Dream Tax Credit" -- up to $1,000 a year for five years to help buy a first home. Barack Obama has a new tax credit to promote fatherhood. Outside of the candidates, competition for the tax-credit… more

The Committee for a Responsible Federal Budget's 2007 board meeting, conference and dinner discussion were held March 13 at the Hyatt Regency on Capitol Hill. This event brought together many of the nation's foremost fiscal policy experts from both parties to discuss the budgetary challenges facing the nation, and the prospects for addressing them before they turn into full-blown crises.

A detailed recap of day's conversations -- including the afternoon round table, OMB Director Robert Portman's spech,… more