Author Archive

Making Saving Incentives More Equitable

Tax expenditures for retirement saving top $100 billion annually—from 401(k)-type plans ($61.4 billion) to IRAs ($17.6 billion) to tax preferences for pensions ($35.1 billion)—but these subsidies disproportionately benefit higher-income households and do relatively little to improve the balance sheets of low- and moderate-income Americans. According to one study, the bottom 40 percent of households received […]

Tax Expenditures for Asset-Building: Costly, Regressive, and Ineffective

Most federal subsidies aimed at helping households accumulate financial and tangible assets are delivered through tax expenditures—spending through the tax code. In 2013, these deductions, deferrals, and credits aimed at encouraging such asset building totaled over $350 billion, most devoted to homeownership and retirement saving incentives. Yet, these tax incentives do a remarkably poor job. […]

Stark Variation in Taxpayer Use of Itemized Deductions, County by County

Taxpayer use of itemized deductions varies widely by location, according to a new analysis of 2007 IRS data. In about one in ten counties, 11 percent or fewer taxpayers itemize while in another 10 percent at least 38 percent of taxpayers claim deductions. In a handful of counties, more than half of taxpayers itemize. In […]

Variation in EITC Take-up, County by County

The Earned Income Tax Credit (EITC) is one of our nation’s most effective anti-poverty policies, bringing 10.1 million families out of poverty in 2012. The EITC is designed to reward work by increasing wages for low-income workers; workers with low incomes can receive up to an additional 45 cents for every dollar they earn. Recognizing […]

Rethinking Homeownership Subsidies

Tax expenditures for homeownership, such as deductions for mortgage interest and property taxes and the partial exclusion for capital gains on the sale of a primary residence, have long been recognized as ineffective, regressive, and extraordinarily expensive—costing $121 billion in 2013 alone. Until now, most reforms—including the Bowles-Simpson deficit-reduction plan—have focused on restructuring the mortgage […]

The US Income Tax Burden, County by County

Differences in income and other characteristics mean that federal income tax  burdens vary substantially across counties. While the median federal income tax burden across counties is about $3,400, approximately 10 percent of counties  have average tax burdens less than $2,100 and around 10 percent of counties have  average tax burdens over $6,700. Counties with high federal […]

Why the Next Debt Limit Debacle Might be Worse

Congress’s latest flirtation with debt-limit default caused barely a ripple in the financial markets. Rates on short-term Treasuries spiked in early October, before quickly subsiding to more normal levels. The spread between one- and three-year Treasuries temporarily widened, but quickly fell back to a more normal trend. All told, financial markets barely blinked. Unfortunately, the […]

Sorting Through The Property Tax Burden

When it comes to property taxes, location matters. In a new TPC report, my colleague Brian David Moore and I look at just how much property taxes vary across states and counties. Using self-reported American Community Survey data, we find that residential property taxes tend to be close to $1,000 per year, with a small […]

What Changes in the Mortgage Deduction Would Mean for Home Prices

Tax preferences for housing are under fire, with mounting evidence that these preferences are inefficient, unequal, and too expensive to warrant a place in the tax code. Critics of proposed changes in the tax treatment of home ownership argue that these reforms would slash home prices at the very time they are showing signs of […]

Why State and Local Governments are Hurting the Recovery

Until the Great Recession, state and local governments played a remarkably constant role through down business cycles. For four decades, when the economy turned sour, state and local governments boosted their spending—mitigating the depths of recessions and adding to growth when the economy revived. (Of course, this growth was partially offset by the negative effect […]