Topic: The US Tax System

Combined Tax Rates and Creating a 21st Century Social Welfare Budget

By :: June 26th, 2015

In testimony yesterday before a joint hearing of two House subcommittees, I urged Congress to modernize the nation’s social welfare programs to focus on early childhood, quality teachers, more effective work subsidies, and improved neighborhoods. One way lawmakers can shift their gaze is by considering the effects of combined marginal tax rates that often rise steeply […]

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How to Pay Zero Taxes on Income of Millions of Dollars

By :: June 24th, 2015

Remember when people complained that hedge fund managers and private equity firm owners paid a lower tax rate than many workers? Or when Warren Buffett said he shouldn’t pay a lower rate than his secretary?  In those cases, investors were benefiting from low capital gains rates, but at least they paid some tax. Now, thanks […]

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One Avenue to Bipartisan Tax Reform: Simplification and Improved Tax Administration

By :: April 8th, 2015

There are many ways to restructure the tax code. Elected officials often fail to detect opportunity when they adhere in a path-dependent way to one past model of success, such the 1986 tax reform.  An alternative approach where even the acclaimed 1986 effort made at best modest progress would focus on making tax code simpler […]

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What Can We Learn from Obama’s Failure to Curb Sec. 529 College Savings Accounts ?

By :: February 2nd, 2015

The President’s budget includes a long list of tax changes including at least one that he has already disavowed: his plan to limit the tax exemption of withdrawals from 529 college savings accounts. The proposal—which would have collected about $1 billion over the next decade—was pilloried from the left and the right as a tax […]

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Will Immigrants Get A Tax Windfall From Refundable Credits?

By :: December 12th, 2014

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 […]

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My Favorite (Expired) Tax Breaks

By :: December 1st, 2014

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, […]

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How Political Gridlock Encourages Tax Avoidance

By :: August 5th, 2014

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 […]

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

By :: August 1st, 2014

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. […]

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How Progressive is Obama’s Tax Policy?

By :: July 23rd, 2014

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 […]

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

By :: July 22nd, 2014

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 […]

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