The Tax Policy Blog

April 23, 2014

Inequality is a hot topic these days. Everyone seems to want to write about it. The launch of TheUpshot, the new project from the New York Times, included a story on the wealth of the middle class, the Times Sunday Review had a column on...

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April 22, 2014

Congressman Patrick Tiberi (R-OH), a House Ways and Means member, recently introduced a bill (H.R. 4457, “America’s Small Business Tax Relief Act of 2014”) that would restore Section 179 to 2013 levels and make the law permanent.

In 2013, Section 179 allowed businesses to write-off the full cost of certain capital investments the year in which they were made. Each qualifying capital investment was limited to $500,000 and the total value of all Section 179 investments a business was...

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April 21, 2014

In a recent column in the New York Times, Mark R. Rank added an important point to the income inequality debate: that people are economically mobile.

From the New York Times:

“It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39...

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April 21, 2014

The reasons for America’s sluggish economic growth in recent years are many fold, but a big part of the problem is high taxes on investment. It is not just the high corporate tax rate – the highest in the developed world – but also the fact that businesses cannot generally write off their investment expenses immediately. Instead, businesses must wait years or...

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April 21, 2014

The LA Times editorial board has endorsed a move for an expanded film tax credit in the Golden State, arguing that “To not nix pics, California must use tax trix.” Given that California’s historical command of the film production industry puts it, and especially Los...

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April 21, 2014

Today is Tax Freedom Day, the day when the nation as a whole has earned enough money to pay its total tax bill for year. A vivid, calendar-based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income. This year, Tax Freedom Day arrives three days later than last year...

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April 18, 2014

One of the provisions under consideration in the tax extenders discussion is a reinstatement of 50 percent bonus expensing for equipment. This would strengthen investment spending and boost the sluggish recovery. It has done so in the past, most clearly in 2002 and 2003 when it helped to turn around a slump in investment and convert the “jobless recovery” into a mini-boom. The provision would do more to bolster the economy if it were made permanent, but half a loaf is better than none....

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April 17, 2014

Tax revenue as a percent of GDP is one metric many use to gauge how much corporate income tax revenue the United States is raising. The advantage of this metric is that it controls for the size of the economy and gives people a readily available way to compare the United States to other countries.

When we look at this metric, the United States has low collections compared to other industrialized nations. The corporate tax raised revenue equal to 2 percent of GDP compared to the OECD...

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April 17, 2014

The question is often asked: Do the rich pay their “fair share” in taxes? It’s never particularly clear what the rich currently pay, nor is it clear what share of taxes is fair for them to pay. A good place to start would be to determine exactly what high-income earners currently pay.

Estimates from Congress’s Joint Committee on Taxation and recently...

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April 16, 2014

We recently outlined a bill introduced by Senator Patty Murray (D-WA), which would expand the EITC and pay for it in part by further limiting the deduction for executive compensation. The Senator believes that the ability for corporations to fully deduct...

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April 16, 2014

Yesterday was Tax Day, and former Defense Secretary Donald Rumsfeld shared a letter he sent to the IRS with his Twitter followers. Rumsfeld said he did his best to fill out his taxes but says he's not sure he got it right, due to the complexity of the tax code:

The tax code...

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April 16, 2014

Gov. Steve Beshear's problematic tax overhaul seems to have fizzled out, with the Legislature enacting a revenue bill with just a few small tax changes. The final plan that became law, HB 445, had many small components leading to only very slight tax changes in the aggregate. The plan...

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April 15, 2014

The American Legislative Exchange Council today released their 7th annual Rich States, Poor States report, which ranks states in two metrics: historical performance based on economic indicators, and forecasted outlook based on policy variables. Here’s the top and bottom 10 breakdown this year:

...
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April 15, 2014

An interesting and delightfully contrarian piece from this tax season was from Howard Gleckman at the Urban Institute: Does Anyone Care About a Simple Tax Code? Gleckman rightly points out that while tax code simplicity has long been a goal of reformers, it becomes less and less relevant to individuals, who no longer do those calculations themselves.

It’s a fair point. Computer...

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April 15, 2014

UPDATE: The Star-Ledger has corrected the original piece.

Dear Editor:

I understand Tom Moran is compelled to attack our Tax Freedom Day report each year (“Tax Freedom Day? It’s bunk: Moran,” 4/...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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