In two weeks, about $1 trillion in automatic spending cuts will begin to kick in, a testament to the inability of policymakers to reach a grand fiscal bargain. Allowing these cuts to happen would be terrible policy. Here’s the background: In August 2011, Congress passed the Budget Control Act (BCA) as a last-minute solution to [...]

The Congressional Budget Office released its latest Budget and Economic Outlook earlier this week.  As always, the Outlook provides insight into the fiscal status of the federal government. My three overarching reactions are: First, because American Taxpayer Relief Act of 2012 (ATRA) instituted tax changes that had been widely expected, the official (“current law”) baseline is now much [...]

In one of the more dangerous fiscal developments of recent months, some on the left are defining successful deficit reduction as merely stabilizing the federal debt at about 70 percent of Gross Domestic Product by 2022. While there is no magic target, this one is far too modest and threatens to leave future fiscal policy [...]

The American Taxpayer Relief Act (ATRA), the New Year’s legislation that effectively forestalled the bulk of the January 2013 fiscal cliff, probably staved off a recession. But compared to doing nothing, Congress made the deficit worse by passing ATRA. New Tax Policy Center calculations show how much more deficit reduction Congress will need to approve [...]

Weird Tax Fact of the Day: The fiscal cliff deal (aka the American Taxpayer Relief Act of 2012) created what may be the world’s tiniest tax bracket. Under the new law, singles face a rate of 35 percent if their taxable income falls between $398,350 and $400,000. The bracket covers a grand total of $1,650. [...]

There is an obvious solution to Washington’s perpetual budget crisis. But it is unlikely to happen because all the incentives—both political and economic—are completely wrong. First, the solution: The core of a deal was framed last December, when President Obama and House Speaker John Boehner were on the verge of a long-term fiscal agreement that would have cut [...]

The fiscal cliff deal is done and the question on everyone’s mind: What about the states?  Okay, so only a handful of us are actually asking this question. But there are some important provisions that will matter to states still woozy from the Great Recession. The good news for states is that American Tax Relief [...]

Huffington Post reports on this tweet/warning from former Bush press secretary, Ari Fleischer: I increased donations to charity in 2012. This deal limits my deductions so I, & many others, will likely donate less in 2013. Mr. Fleischer is referring to the phaseout of itemized deductions, which had temporarily expired but was reinstated by the Tax [...]

Following Congress’s last minute passage of legislation averting a plunge off the fiscal cliff, TPC has released a new Tax Calculator that lets users examine the effects of the American Taxpayer Relief Act of 2012 (ATRA). As with earlier versions, the new calculator compares income and payroll tax liabilities under alternative scenarios: ATRA, the tax [...]

Everyone trying to sort out the fiscal cliff deal is getting hopelessly tangled in budget baselines.  Are taxes going up? Or are they going down?  There is an easier way: Forget the multiple baselines. Just look at what is happening to total spending and total revenues. My Tax Policy Center colleagues ran the numbers and they tell [...]