When Congress finally extends the payroll tax cut that is due to expire in a few weeks, it may also be taking another step down the road to tax reform—and perhaps even to big Social Security changes as well. Why? Because without fundamental reform, it will be devilishly hard for Congress to ever get rid [...]

Last December, Congress replaced the two-year-old Making Work Pay tax credit (MWP) with this year’s payroll tax cut. That change cut taxes for higher-income workers, raised taxes for some low-wage workers, and nearly doubled the amount of lost tax revenue. And it most likely provided less bang-for-the-buck economic stimulus than the credit it replaced. Since [...]

Should Congress extend and expand the payroll tax cut it first passed a year ago? In a bizarre but not unexpected role reversal, Democrats insist that at a time of economic uncertainty, Congress must not only extend this tax cut but make it even more generous. And Republicans seem to have somehow discovered a tax break [...]

When you get right down to it, the jobs plan President Obama proposed before a joint session of Congress last night was built on three elements:  A large payroll tax cut, lots of new spending on public infrastructure, and a promise that its $447 billion cost would be paid for with yet-to-be disclosed tax hikes and [...]

After I wrote last week about Warren Buffett’s New York Times op-ed on the low tax rates paid by wealthy investors, Tax Policy Center visiting scholar Brian Galle pointed out that my graph showing the maximum tax rates Americans could pay was misleading. Actual tax rates, he noted, are much lower than what the graph [...]

When Warren Buffett called for higher taxes on the wealthy in a New York Times op-ed last week, the billionaire investor argued that he and wealthy people like him face lower federal rates than the rest of us. Low rates on long-term capital gains and qualified dividends and limited exposure to payroll taxes mean low [...]

In Washington, bad ideas never go away. Now two old tax breaks have resurfaced with the ostensible goal of creating jobs, despite plenty of evidence that neither actually works. One would create a payroll tax break (aimed at employers instead of workers this time). The other would grant a temporary tax holiday to multinational corporations that [...]

Will Donald Trump bring Barack Obama’s birth certificate to the Royal wedding? I have no idea, but now that I’ve made our Web optimization folks happy, here is another question: What’s the deal with the People’s Budget, the fiscal plan released this week by 80 congressional progressives? The answer is likely to drive less traffic than [...]

A major goal of last December’s Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka extending the Bush-era tax cuts) was to boost the economy by avoiding scheduled tax increases and, at the same time, adopting a few new tax cuts. Both steps, supporters claimed, would put more money in people’s pockets [...]

Many retirees were surprised when their January pension checks were smaller than their December payments. Pension plans had increased withholding for federal income tax, shrinking net benefits. But pensioners shouldn’t worry—they’ll get it all back next year when they file their federal tax returns. It’s only a matter of timing. What’s going on? The 2010 [...]