If you’re discussing tax policy with someone who asserts that his or her point is “just common sense,” this could indicate one of two things: Either no deep thought is required—as the person would have you believe. Or no deep thought has been applied. The “common sense” notion that capital income taxes hinder growth seems [...]

Looking for a way to improve the operation of the economy, lower our dependence on foreign oil, reduce pollution, slow global warming, cut government spending, and decrease the long-term budget deficit? Then you should support a carbon tax, which could help the nation address all these issues simultaneously. A new paper I’ve written with Samuel [...]

Changing the way government adjusts spending and taxes for inflation is one of those issues that continues to hang around the edges of the budget debate. Republicans and many economists argue for shifting to a more accurate inflation measure, called the chained Consumer Price Index (CPI). President Obama would support a version as part of a [...]

Senator Jeff Sessions (R-AL) has created quite a stir with his estimates that every household below the poverty level receives an average of $168-a-day (or about $61,000-a-year) in government welfare. Sessions’ calculations are extremely controversial and overstate the amount of government assistance for those in poverty. But for the sake of argument, let’s assume he’s right. [...]

As regular readers of Tax Vox know, I don’t believe there is much chance President Obama and Congress will agree on individual broad-based tax reform in 2013. Without a deal on how much this new tax system should raise, talking about a big rewrite is futile. However, Obama and Congress still have an opportunity to do something very [...]

Economists and many policymakers generally agree that our tax and transfer systems should promote opportunity, work, saving, and education rather than consumption. The problem is these programs often penalize people for earning that extra dollar of income. Rather than promoting work and savings, these implicit taxes punish such otherwise positive behavior. These penalties occur in [...]

Can the income tax fund the government we seem to want? Probably not. Will lawmakers create a revenue system that will? Not anytime soon. That was the consensus of four tax policy experts at an Urban Institute panel I moderated this afternoon. The panelists–historian Joe Thorndike, Urban Institute economist and tax reform veteran Gene Steuerle, [...]

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.  [U.S. Constitution, 16th Amendment] On February 3, 1913, Delaware became the 36th state to ratify the 16th amendment to the Constitution, which authorized the US Income Tax. [...]

The American Taxpayer Relief Act (ATRA), the New Year’s legislation that effectively forestalled the bulk of the January 2013 fiscal cliff, probably staved off a recession. But compared to doing nothing, Congress made the deficit worse by passing ATRA. New Tax Policy Center calculations show how much more deficit reduction Congress will need to approve [...]

House Ways and Means Committee Chairman Dave Camp (R-MI) has proposed requiring most derivatives investors to pay tax on their annual returns even if they don’t realize their gains by selling their securities. This proposal, which requires investors to mark-to-market the value of financial derivatives, has ramifications far beyond the heady world of high-tech finance. [...]