I get the impression that many Americans believe Medicare is financed like Social Security. They know that a portion of payroll taxes goes to Social Security and a portion goes to Medicare. So they conclude workers are paying for Medicare benefits the same way they are paying for Social Security benefits. That isn’t remotely true, [...]

In a new study, Chuck Blahous, who is a public trustee for Medicare and Social Security, concludes that the 2010 health law will add at least $340 billion to the federal deficit from 2012-2021. This is contrary to the official estimates by the Congressional Budget Office, which initially figured the Affordable Care Act would reduce the [...]

Why do we bother with government trust funds? As the Senate’s just-passed highway bill proved yet again, Congress is turning these funds into little more than accounting shams. In theory, it makes sense to establish special accounts where designated revenues are set aside for a specific purpose. But in practice, Washington is grossly abusing the [...]

We’ve all seen the articles in Forbes, Kiplingers, or U.S. News trumpeting the best states to live in retirement. A key measure for them all: Low taxes. What you may not know is that states actively compete with one another to provide tax breaks to older residents—especially to wealthy seniors. This competiton is similar to the way [...]

After much anguish, Congress finally extended this year’s payroll tax cut for two more months. The final bill passed in nearly empty chambers a couple of days before Christmas. But this version differed in an important way from the measure passed by the Senate just a few days earlier. The final bill removed a cap [...]

House Republicans are right about one thing at least: Extending this year’s payroll tax cut for two months is ridiculous. The trouble is they are largely to blame for the very policy they are criticizing. Congress got itself in this mess because a few dozen self-styled tea partiers have refused since last summer to helo build a [...]

The fate of The Temporary Payroll Tax Cut Continuation Act of 2011 remains uncertain. But thanks to a carefully crafted technical change to the current payroll tax cut, the Senate version prevents a handful of very high wage earners from potentially enjoying a huge windfall from the two-month tax break. The legislation would cut the [...]

When Congress finally extends the payroll tax cut that is due to expire in a few weeks, it may also be taking another step down the road to tax reform—and perhaps even to big Social Security changes as well. Why? Because without fundamental reform, it will be devilishly hard for Congress to ever get rid [...]

Should Congress extend and expand the payroll tax cut it first passed a year ago? In a bizarre but not unexpected role reversal, Democrats insist that at a time of economic uncertainty, Congress must not only extend this tax cut but make it even more generous. And Republicans seem to have somehow discovered a tax break [...]

Want to know what the Great Budget Debate of 2011 is really about? Ask Congressional Budget Office director Doug Elmendorf (who was a Tax Policy Center associate before joining CBO). In testimony to Congress’s  fiscal super committee on Tuesday, Doug put the whole thing into a few simple sentences: “I think really the fundamental question…is…where [...]