Archive for the ‘The US Tax System’ Category

Why Not Ditch the Medical Device Excise Tax and Boost Cigarette Taxes?

Senate Republicans are insisting that the 2.3% excise tax on medical devices, enacted as part of the Affordable Care Act, be repealed as part of the package extending expired tax provisions. Democratic Senate Majority Leader Harry Reid says the proposal to chip away at part of Obamacare is not germane and has refused to allow […]

Don’t Turn Over IRS Debt Collections to Private Contractors

The latest example of why bipartisanship is not necessarily good: A bill proposed by senators Chuck Schumer (D-NY) and Pat Roberts (R-KN) to require the IRS to hire private debt collectors. The last time Congress made the IRS try this, the agency lost money. It was a terrible idea then and it is a terrible idea now. Schumer and Roberts slipped […]

Taxing Employer-Sponsored Insurance Would Hike Social Security Benefits But Boost Federal Coffers

The tax subsidy for employer-sponsored health insurance is huge. Not only are the premiums exempt from income tax, they are also immune from Social Security payroll tax. The two subsidies combined will add more than $1.6 trillion to the deficit over the next five years alone. But because that income is not included in the […]

The Tax Extenders: Yes, Virginia, They Really Are Tax Cuts

The other day, the House Ways & Means Committee voted to cut taxes for certain businesses by $310 billion. Washington, being Washington, is now in the midst of a partisan debate over whether this is in fact a tax cut or, conversely, whether failing to cut those business levies would be a tax increase. This […]

If Congress Lets Firms Expense Investments, It Should Take Away Their Interest Deduction

Egged on by business lobbyists, congressional tax writers seem increasingly interested in allowing firms to rapidly write off the cost of their capital investments. Especially in the House, lawmakers would allow small businesses to expense the full cost of their investments in the year they are acquired, and let larger firms heavily front-load tax depreciation […]

Two Ways to Fix the Corporate Income Tax: Internationalize it or Kill It

In an important new paper, Eric Toder of the Tax Policy Center and Alan Viard of the American Enterprise Institute say that corporate tax reforms now being debated in Congress fall far short of solving the widespread problems with the levy. Rather than merely lowering rates and tinkering with tax rules for U.S.- based multi-national […]

Why Most Tax Extenders Should Not Be Permanent

What to do about the tax extenders—or, as my colleague Donald Marron calls them, the “tax expirers”? Restoring the current crop (most of which expired on December 31) for 10 years would add about $900 billion to the deficit. House Ways & Means Committee Chair Dave Camp (R-MI) and Senate Finance Committee Chair Ron Wyden […]

Dave Camp’s Plan for the Expired Tax Provisions: An Almost-Good Idea

House Ways & Means Committee Chair Dave Camp (R-MI) has a plan for what to do with scores of now-expired tax subsidies that are sitting in Congress’ lap. He wants to review each one on its merits and either make it permanent or (by implication at least) kill it. Camp is on to something, although […]

Profiles in Courage at the IRS (Really)

Let’s take a break from fake IRS political scandals to consider how the Service handled a real scandal 45 years ago.  Randolph W. Thrower was IRS commissioner from 1969 to 1971. The Nixon White House insisted that the IRS audit the president’s enemies. Thrower, a lifelong Republican, refused to do it. According to the Washington […]

Fiscal Reality Check: Will Congress Pay for the Tax Extenders and the Doc Fix?

After it returns from Spring Break next week, Congress may face two big fiscal reality checks. It will have to decide whether to temporarily extend scores of expiring tax provisions and what to do about permanently adjusting the formula Medicare uses to pay physicians (the “doc fix”). Combined, these two measures would add about $65 billion to the […]