Topic: The US Tax System

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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Abuse of financial products by hedge funds

By :: July 22nd, 2014

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 […]

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The Great Tax Inversion Death Spiral

By :: July 17th, 2014

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. […]

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

By :: July 16th, 2014

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 […]

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Making Saving Incentives More Equitable

By :: July 8th, 2014

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 […]

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The Real IRS Flap Is About Dark Money, Not Emails

By :: June 24th, 2014

Don’t get distracted by the political theater over lost IRS emails. There is little new about headline-seeking politicians berating IRS Commissioner John Koskinen. Like most of what happens in Congress these days, these second-rate star chambers do little more than create cable TV sound bites and base-motivating outrage. But get past the shouting and two […]

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The Strange Fruit of the House’s Bonus Depreciation Bill

By :: June 13th, 2014

When the Ways & Means Committee sent the House a measure to make permanent extra-generous tax subsidies for firms that purchase capital equipment, I noted in passing that the bill included a provision extending “bonus depreciation” rules to fruit and nut trees. If I had read the bill more carefully, I would have noticed that while […]

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Are Domestic Partnerships A Way For Heterosexual Couples To Avoid The Marriage Tax Penalty?

By :: June 5th, 2014

In their zeal to provide a legal alternative to banned marriage for same-sex couples, some states may have created a new tax shelter for heterosexual couples. By choosing domestic partnership or civil union over marriage, opposite-sex couples are able to avoid paying a federal income tax marriage penalty, just as same-sex couples can. Over the […]

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Dave Camp’s Great Bonus Depreciation Flip-Flop

By :: May 29th, 2014

Sadly, the House Ways & Means Committee has turned on its head a proposal by its chairman, Dave Camp (R-MI) to repeal bonus depreciation for business capital investment. Instead of scrapping the measure, which Congress originally passed in 2008 as a temporary anti-recession tonic, the panel has voted to make the tax break permanent. And, […]

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

By :: May 23rd, 2014

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 […]

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