2013 is a tough year if you owe payroll tax, as most of us do. Not only did the 2010 payroll tax cut die at the end of 2012, but high-income workers now owe an extra 0.9 percent, thanks to the Affordable Care Act. Economists worry about what the combined new taxes will mean for [...]

House Budget Committee Chair Paul Ryan (R-WI) has proposed a controversial  plan to balance the budget in 10 years, entirely by cutting planned spending by $4.6 trillion. While Ryan includes lots of specific spending cuts, his tax agenda is far less clear.    In some respects, the former GOP vice presidential candidate mimics the tactics [...]

House Republicans say they want to balance the budget in a decade with only spending cuts and no tax hikes. In his state of the union address tonight, President Obama—perhaps channeling his new pal New Jersey Governor Chris Christie—had a response. In a word, fuhgedaboutit. Obama’s priorities: Gun control and immigration reform, along with a [...]

The Congressional Budget Office released its latest Budget and Economic Outlook earlier this week.  As always, the Outlook provides insight into the fiscal status of the federal government. My three overarching reactions are: First, because American Taxpayer Relief Act of 2012 (ATRA) instituted tax changes that had been widely expected, the official (“current law”) baseline is now much [...]

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, [...]

In one of the more dangerous fiscal developments of recent months, some on the left are defining successful deficit reduction as merely stabilizing the federal debt at about 70 percent of Gross Domestic Product by 2022. While there is no magic target, this one is far too modest and threatens to leave future fiscal policy [...]

If their leaders’ public statements are to be believed, the fiscal chasm between the political parties is widening. And it is hard to see how it can be bridged.    Congressional Democrats and Republicans have agreed to put off the next budget crisis for a month or so. This is a good thing, especially considering [...]

Weird Tax Fact of the Day: The fiscal cliff deal (aka the American Taxpayer Relief Act of 2012) created what may be the world’s tiniest tax bracket. Under the new law, singles face a rate of 35 percent if their taxable income falls between $398,350 and $400,000. The bracket covers a grand total of $1,650. [...]

There is an obvious solution to Washington’s perpetual budget crisis. But it is unlikely to happen because all the incentives—both political and economic—are completely wrong. First, the solution: The core of a deal was framed last December, when President Obama and House Speaker John Boehner were on the verge of a long-term fiscal agreement that would have cut [...]

Following Congress’s last minute passage of legislation averting a plunge off the fiscal cliff, TPC has released a new Tax Calculator that lets users examine the effects of the American Taxpayer Relief Act of 2012 (ATRA). As with earlier versions, the new calculator compares income and payroll tax liabilities under alternative scenarios: ATRA, the tax [...]