Archive for the ‘The US Tax System’ Category

Will Immigrants Get A Tax Windfall From Refundable Credits?

In the end-of-the-year congressional scramble, lawmakers scuttled an effort to permanently extend a number of tax breaks—largely because many feared it would open the door to widespread use of refundable tax credits by undocumented immigrants covered by President Obama’s recent executive order.  But is their concern justified? Three sets of rules related to residency and […]

My Favorite (Expired) Tax Breaks

And now, for a lighter look at tax extenders, here’s a song that borrows the tune of The Sound of Music’s “My Favorite Things.” If you’re looking for something more serious, check out Len Burman’s TaxVox thoughts on the issue. My Favorite (Expired) Tax Breaks Special deductions of teachers’ expenses, Tax-free forgiveness for lost residences, […]

How Political Gridlock Encourages Tax Avoidance

In July, Treasury Secretary Jack Lew asked Congress to stop the current wave of corporate expatriations. The legislation is going nowhere, and Treasury and the IRS are unwilling to act on their own, though some legal experts believe they already have the authority to curb the transactions. This is just the most recent example of […]

A New Way to Invest for Old Age, But How Many Will Buy?

A few weeks ago, with absolutely no fanfare, the Treasury Department announced what could be a major change in the way we save for retirement. It will now permit people to shift a portion of their 401(k)s or IRAs into a deferred annuity that provides a guaranteed stream of income once you reach old age. […]

How Progressive is Obama’s Tax Policy?

Has President Obama’s tax policy reduced income inequality? It depends on what you are comparing it to. White House Council of Economic Advisors chief Jason Furman claims that President Obama’s tax policies have sharply reduced inequality. Today’s Washington Post Wonkblog featured some new tables from the Tax Policy Center that show Obama tax policy is […]

Have We Created a Two-Tiered Tax System—One for the Powerful and One for the Rest of Us?

Unlike the rest of us, many high-income, influential people and organizations have close to a free hand when it comes to their taxes. Already underfunded and understaffed, the IRS seems incapable of stopping many aggressive or even abusive interpretations of the tax laws, often by hedge funds or politically-motivated tax-exempt organizations. Over the past few […]

Abuse of financial products by hedge funds

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee: Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, long-term meant holding assets for […]

The Great Tax Inversion Death Spiral

Congress and corporate America are in a dangerous and mutually destructive race: The more lawmakers threaten to ban the practice of inversions—where U.S. based multinationals merge with foreign firms to lower their tax bill– the more firms race to complete the deals while they can. The more deals, the more pressure on Congress to ban them. […]

Nothing New Under the Sun: The Sad History of the Tax Extenders.

Nice piece by Tax Notes reporter Lindsey McPherson describing the recent history of the tax extenders. Four take-aways:  There is always last-minute drama over bringing them back, most are repeatedly extended, they are almost never paid for, and they are frequently rolled into a bigger bill. In 2004, 2006, 2008, 2010, and 2012 the subsidies […]

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 […]