The Dead, the Devices, and the Errors
By Renu Zaretsky :: May 14th, 2014
Dead Men Ruling, future governing paralyzed. Will 21st century America be able to govern itself, given lawmakers’ effective abdication of the future? In TPC’s Gene Steuerle’s new book, Dead Men Ruling, the prospects are dim. Automatic spending and untouchable tax subsidies have limited government’s flexibility to adjust to changing times and circumstances. Short-term and politically expedient subsides aimed at increasing today’s consumption are funded by debt to be paid off by future taxpayers. As TPC’s Howard Gleckman’s review of the book shares, the future is being written by those who will be “long dead when our grandchildren come of age.”
Speaking of the dead… Republicans are trying to repeal the excise tax on medical devices, no doubt pleasing corporations like Medtronic and Boston Scientific. Last year 79 senators voted to repeal the excise tax—but the vote was non-binding. The repeal effort is part of the broader tax bill that senators debate on the floor this week which would revive more than 50 tax breaks that died five months ago. The new breaks would live through through 2015, and their reanimation would add over $84 billion to the deficit.
More money, more problems. Improper Earned Income Tax Credit payments still plague the IRS. The Treasury Inspector General for Tax Administration reports that 22 percent to 26 percent of EITC payments were made in error in 2013, amounting to an estimated $13 billion to $16 billion. The error rate is up from an estimated 21 to 25 percent in 2012 and includes underpayments as well as overpayments. The problems in administering the EITC are complex. In a statement the IRS noted that there are several legislative proposals that would give the agency authority to correct certain filing errors and reduce the improper payments. Congress to the rescue! Right?
Interested in subscribing to The Daily Deduction, the Tax Policy Center summary of the day’s tax news? Sign-up here for free access. If you’d like to tell us about a new research paper or have any comments about our new feature, write us at firstname.lastname@example.org.