Last week’s draft plan by House Ways & Means Committee Chair Dave Camp (R-MI) to reform the taxation of financial products includes two key changes that would simplify rules, reduce manipulation, minimize compliance burdens, and improve tax administration. The first would require investors to use the “mark-to-market” method of accounting for all derivatives, other than [...]

In Sunday’s New York Times, Richard Thaler laments that “as a general rule, the United States government is run by lawyers who occasionally take advice from economists.” That makes for better policy than a tyranny of lawyers alone. But it certainly isn’t enough. Policy is ultimately about changing the way people behave. And to do [...]

The Treasury may be losing as much as $5 billion a year from fraudulent tax refund claims—and most of that fraud is entirely preventable. The New York Times reportedyesterday about the rampant use of identity theft to exploit weaknesses in the IRS’s tax refund processes, sometimes resulting in thousands of fraudulent refunds. The most common form [...]

Sellers of stocks and other assets have always had to calculate their cost basis (generally, what they paid for the investment) in order to figure their taxable capital gains. In the past, this was often a hit-or-miss experience that required lots of tedious research (occasionally with help from brokers) and more than a bit of [...]

Like many of you, I just finished my 2011 tax return. Counting worksheets, it was 59 pages long. It occurs to me that our current insanely complex tax rules are made possible by technology. Yes, computer software makes filing easier (both for professionals and civilians). But that may be the problem. The relative ease of filing, [...]

On Tuesday, I testified before the Senate Finance Committee at a hearing titled “Extenders and Tax Reform: Seeking Long-Term Solutions.” I was already depressed about the state of our tax system before I started preparing. As I drafted my testimony, I became distraught. Our tax system is a mess and unless we send a clear [...]

Ernest Hemingway: I am getting to know the rich. Mary Colum: I think you’ll find the only difference between the rich and other people is that the rich have more money. It turns out that when it comes to taxes, at least, Ms. Colum, was mostly—but not entirely–right. To see why, let’s take a quick [...]

An interesting blog from my Urban Institute colleague Brett Theodos on the use of refund anticipation loans and refund anticipation checks among low-income tax filers:  It’s tax day, and gauging by past years, nearly 20 percent of us have yet to file. But something very different is going on for low-income families. Many were among the [...]

With only a weekend left to settle up with Uncle Sam, figuring out how much you owe (or stand to gain) is far from child’s play—particularly if you have kids. Parents must wade through page after page of rules for the dependent exemption, head of household filing status, the Child Tax Credit (CTC), the Earned [...]

The two big stories of this campaign season are voter backlash against Democrats and the rise of the so-called Super PACs– massive campaign funding organizations that use the tax law to protect the anonymity of their donors. These money laundries, organized as 501(c)(4) groups under the Internal Revenue Code, violate the spirit of the tax [...]