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 [...]

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 [...]

In what will probably be the usual endless laundry list of State of the Union promises, President Obama is likely to include tax reform, by which he means a rewrite of the corporate revenue code. The White House seems ready to take a run at lowering corporate rates and scaling back targeted business subsidies. So [...]

In the realm of needless complexity, the work and family tax credits for low-income households rank near the top. The problem is especially challenging for immigrant families whose children’s legal status and residency determine eligibility for these credits. A few weeks ago, the National Taxpayer Advocate in her Annual Report to Congress joined many others [...]

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 [...]

In the alphabet soup of Washington, ATRA fixed the AMT, sort of. In English, the newly enacted American Taxpayer Relief Act of 2012 will permanently protect millions of taxpayers from having to pay the alternative minimum tax without Congress having to approve a temporary patch every year or so. It even knocks a few hundred [...]

I spent lunchtime today moderating a thoroughly discouraging Urban Institute panel discussion on the fiscal cliff. The consensus of the speakers—all highly-regarded budget experts—was that the New Year’s cliff deal was pretty lame and the coming round of self-imposed budget crises will be even worse. My Urban Institute colleagues Donald Marron, Rudy Penner, and Bob Reischauer—each of [...]

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 [...]

Everyone trying to sort out the fiscal cliff deal is getting hopelessly tangled in budget baselines.  Are taxes going up? Or are they going down?  There is an easier way: Forget the multiple baselines. Just look at what is happening to total spending and total revenues. My Tax Policy Center colleagues ran the numbers and they tell [...]

In the end, it looks like Congress isn’t even going to kick the fiscal can down the road. Assuming the House passes the deal agreed to by the Senate on New Year’s Eve, lawmakers will barely get that battered tin container it off the front stoop. The agreement preserves nearly all of the 2001-2010 tax [...]