Federal Tax

Additional evidence on the economic benefits of full expensing of investment was recently published in the American Economic Journal: Economic Policy. Two new studies exploit changes in the UK and Chinese tax codes and observe that movement towards a system of full, immediate expensing grows the economy and fosters a more productive business environment. At
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When politicians need to generate revenue for new and existing programs, they often suggest increasing taxes on the wealthiest earners, such as increasing taxes on capital gains. Increasing taxes on capital gains is one way policymakers can generate revenue, but doing so could also negatively impact saving. Data from the Statistics of Income division of
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Democratic presidential candidate and former Vice President Joe Biden recently released a health-care plan that, according to his campaign, would cost $750 billion over a decade. To finance the health-care plan, he would 1) increase the top marginal income tax rate on long-term capital gains to 39.6 percent for taxpayers earning more than $1 million
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Last month, Democratic presidential candidate and former Texas congressman Beto O’Rourke reintroduced his “war tax” proposal as part of a broader initiative to address veterans’ issues. It mirrors the Veterans Health Care Trust Fund Act, which stalled in the House of Representatives when he introduced it in 2016 and 2017. Though there have been other
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You can grill out and wear flag paraphernalia all you want, but no Fourth of July celebration is complete without fireworks—and Americans are willing to pay to get their patriotism bursting in air. According to the American Pyrotechnic Association, Americans spent over $1.3 billion on fireworks in 2018, with consumer fireworks accounting for $945 million of
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Earlier this year, Senator Roy Blunt (R-MO) and Senator Ben Cardin (D-MD) introduced the New Markets Tax Credit Extension Act of 2019, which would permanently extend the New Markets Tax Credit (NMTC) and increase NMTC allocations, among other changes. The NMTC was originally established by the Community Renewal Tax Relief Act of 2000. It was
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Tomorrow, the House of Representatives will vote on H.R. 748, sponsored by Representative Joe Courtney (D-CT). This bill would repeal the excise tax on high-cost employer-sponsored health coverage, otherwise known as the “Cadillac tax,” for taxable years starting after 2019. While repealing is likely to pass the House, ideally, the tax should be implemented. It
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Erratum: Data used in an earlier version of this blog did not account for the refundable portions of the Earned Income Tax and Child Tax Credits. This data is now included. At the end of June, the Internal Revenue Service released the first set of tax return data from 2018. These are the first numbers
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Taxing transportation fringe benefits was one of many changes to the tax code arising from the Tax Cuts and Jobs Act (TCJA). However, most of these benefits are still taxed differently than wages, making the tax code more complicated and favoring some forms of compensation over others. Ideally the tax code should treat all compensation
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On July 10, the Taxpayer Advocate Service (TAS) released a set of recommendations to expand and simplify the Earned Income Tax Credit (EITC). This refundable credit is praised by some for its role in decreasing poverty and encouraging work among certain groups. However, the number of improper payments associated with the EITC makes legislators hesitant
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