The Tax Policy Blog

December 12, 2014

The problem with free stuff, simply put, is that too many people want it. If you see a promotion for something like 7-Eleven’s Free Slurpee Day, you always end up having to temper your excitement when you realize that you’ll inevitably be waiting in line with the many others who want to enjoy the same treat. This is an unfortunate fact of life, the sort of thing we all reluctantly come to grips with by the time we turn twelve or so.

What puzzles me, then, is why we so often forget...

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December 12, 2014

An article in today’s Wall Street Journal presents conflicting evidence on the benefits of bonus depreciation, a provision in the tax extenders package currently being debated in Congress. Bonus depreciation allows companies to immediately write-off (expense) 50 percent of the cost of equipment and software. Normally, companies are required to depreciate...

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December 11, 2014

A piece from Christopher Flavelle at Bloomberg yesterday discussed dynamic scoring, and the thoughts of former Republican directors of the Congressional Budget Office on the subject. He sees the remarks of the former directors as a case against dynamic scoring, but it’s somewhat hard to see why. If anything, their remarks seem to refute the most common arguments against dynamic...

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December 11, 2014

Tax and fiscal policy are a key priority for the economy going forward, according to over one hundred leading CEOs who attended this year’s Wall Street Journal CEO Council.

In the annual meeting earlier this week, CEOs cited fiscal policy changes—in addition to issues regarding primarily structural reform of education and infrastructure—as key reforms to boost US competitiveness....

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December 11, 2014

Many Americans are familiar with the federal alternative minimum tax (AMT) as a calculation that they have to do at the end of their individual tax form if they take “too many” deductions. Not everyone is aware that the federal government also subjects corporate entities to the AMT, and a few handfuls of states do too. This week’s map shows which states levy a corporate AMT as of July 1, 2014, the snapshot date of our...

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December 10, 2014

The Treasury Inspector General for Tax Administration (TIGTA) this week released yet another report on the issue of improper payments in refundable tax credits. Improper payments are any sort of payment made by the IRS in error – whether from an honest mistake or from deliberate fraud by the tax filer. The report concluded that “significant changes in IRS compliance processes would be necessary to make any...

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December 10, 2014

On Tuesday night, the House of Representatives and the U.S. Senate agreed to terms on a spending bill that will fund the federal government through September 30, 2015. Congress must pass the bill by Thursday to avoid a government shutdown.

The...

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December 09, 2014

Photos from the Tax Foundation’s 77th Annual Dinner are here!

We’d like to thank everyone who attended for joining us on such a special and exciting evening. We had a wonderful time and we hope you did, too. We’re already looking forward to our 78th Annual Dinner in 2015 and hope to see you there!

...

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December 08, 2014

For many decades, Congress has used static scoring for tax legislation, which assumes taxes have no impact on the overall economy. That is hard to defend, especially among those who were taught in economics that prices matter. This is why there has been a push for dynamic scoring which takes into account how taxes affect incentives to work and invest. Dynamic scoring will tell you, for instance, that if tax rates are raised to 100 percent, don’t expect everyone to just keep on working and...

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December 08, 2014

You might be tempted to say, “a non-existent tax” is the simplest, though that would not accurately answer the question. Instead, a per-person or lump-sum tax is arguably the right answer.

Economist Joel Slemrod provided this answer in his chapter in Henry Aaron and William Gale’s book, Economic Effects of Fundamental Tax Reform. The topic of tax complexity was an important part of the discourse concerning fundamental tax reform at that time, and still is today. Nonetheless...

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December 05, 2014

In November, the Congressional Budget Office (CBO) released the latest annual edition of its report on the distribution of household income and federal taxes, with data for 2011. The CBO study confirms that the federal tax system is progressive. It further shows that government transfers to households are also progressive. (For a brief overview of CBO’s findings, see...

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December 04, 2014

On Wednesday of this week, the U.S. House of Representatives passed a $42 billion package that would extend the nearly 50 tax provisions in the “tax extenders” bill through the end of 2014.

The one year extension came following a veto threat from the president that halted talks between Senate Majority Leader Harry Reid (D-NV) and House Ways and Means Chairman Dave Camp (R-MI) on a $...

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December 03, 2014

Her Majesty’s Treasury in the UK released its autumn statement today with changes to the Stamp Duty Land Tax (SDLT), which is a tax on the purchase or transfer of property or land. The changes reduce taxes for 98 percent of those who pay the tax but increase the effective tax on all sales above £2,100,000, roughly $3,300,000.

The key provision is a switch from a...

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December 03, 2014

This week, Bloomberg Businessweek reported that corporate tax inversions will cost the U.S. Treasury $2.2 billion in corporate tax revenue in 2015. According to the report, this is double what they cost the Treasury this year, and inversions will continue to cost $2 billion a year into the future. While $2.2 billion is nothing to scoff at, the report gives no context to this...

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December 03, 2014

The New York Times yesterday published an op-ed criticizing bonus depreciation, one of the extenders that Congress is considering renewing. The piece takes an accusatory tone, calling the policy “audacious dishonesty” and a “license to steal,” but the policy is a great deal more in...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog 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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