The Tax Policy Blog

January 06, 2015

In a Politico op-ed, Rep. Chris Van Hollen (MD-D) and Rep. Louise Slaughter (NY-D) point to Kansas as an example of how “’dynamic scoring’ cooks the books.”

“In 2012, the Governor of Kansas enacted massive tax cuts tilted toward the wealthy, promising that they would provide a “shot of adrenaline” for the state’s economy. He shrugged off the...

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January 05, 2015

According to the tax preparation firm, H&R Block, as many as 3.4 million people, or half of all who received subsidies for health insurance through Obamacare exchanges, will have reduced tax refunds this year.

This is due to the fact that many individuals who purchased insurance policies on the healthcare exchanges received subsidies that were too large...

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January 05, 2015

One issue in policy that I believe needs more attention is the issue of implicit marginal tax rates on lower-income families. The problem, simply put, is that means-tested benefits “phase out,” so as you earn a dollar of income, you lose some of that money in benefits. These phaseouts add implicitly to marginal tax rates, which are problematic because they reduce the returns to productive work.

The Center on Budget and Policy priorities recently released a...

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January 02, 2015

Happy New Year from the Affordable Care Act (yes, again!)

As the ball dropped to mark the beginning of the New Year, another piece of the Affordable Care Act went into effect: the employer mandate. Through an incredibly complex system of rules, the IRS may penalize certain employers for not offering sufficient health insurance to employees.

The IRS has issued a...

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January 01, 2015

Happy New Year from the Affordable Care Act!

You probably haven’t even yet seen the individual mandate from the Affordable Care Act on an actual tax form. Unless you’ve been looking at the new 1040 (and I hope, gentle readers, that most of you had better things to do with your holidays) you haven’t yet seen the mandate in action. It’s on line 61, and it results in extra tax liability if you failed to obtain health insurance...

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December 31, 2014

An important piece of the Affordable Care Act is its subsidies for health insurance premiums. These subsidies are meant to help low-income families afford health insurance that they purchase from the health insurance exchanges. The Affordable Care Act provides these subsidies through the tax code as a refundable tax credit called the Premium Tax Credit (PTC).

The PTC is provided to taxpayers with incomes between 100 and 400 percent of the federal poverty level (between $23,850 and $...

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December 31, 2014

The IRS has officially announced that tax filing season will begin on January 20, 2015. At Forbes, Kelly Phillips Erb notes that this is actually a week and a half earlier than the start dates for 2013 and 2012.

This is a remarkably fast turnaround, given that the tax code for 2014 was in flux right until the middle of December, when the extenders bill was...

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December 31, 2014

With 2015 comes a number of state tax changes effective January 1:

  • Arizona’s corporate income tax drops from 6.5 percent to 6.0 percent, as part of multi-year package reducing it to 4.9 percent by 2018.
  • Illinois’s income tax drops from 5 percent to 3.75 percent...
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December 29, 2014

The French government will quietly allow its millionaire's tax to expire. While the millionaire's tax was relatively insignificant from an actual budgeting standpoint, the 75% rate on earnings over a million Euros attracted a lot of attention worldwide, simply for the eye-popping rate. This tax also resulted in actor Gerard Depardieu leaving the country in a dramatic one-man protest.

The...

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December 19, 2014

Japan looks likely to cut its corporate tax rate by 2 to 3 points in 2015, according to Bloomberg:

Japan’s corporate income tax may be cut by more than 2 percentage points next year and reduced to less than 30 percent within five, Economy Minister Akira Amari said.

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December 18, 2014

The Washington Post has denounced the inclusion of bonus depreciation in the just-passed tax extenders bill for 2014. The correct term is “partial expensing.” There is nothing “bonus” about it. The partial...

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December 18, 2014

Technically speaking, Vermont’s gubernatorial election isn’t finished yet, but universal health care is. A long-awaited blueprint for the state’s planned transition to single-payer, just released, has been termed “detrimental to Vermonters”—not by the opposition, but by the Governor who made single-payer health care his signature issue.

Because no candidate received a majority of votes cast in November’s election, the selection of Vermont’s next Governor is up to the legislature,...

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December 17, 2014

There has been considerable discussion about the corporate tax system in the U.S. and the IRS’s global reach in the media over the past year. The rash of corporate inversions was the catalyst for the public discussion of the outdated worldwide corporate tax system, which only six other countries have.

The IRS’s global reach also extends to personal income as well. Citizens and green card holders who work abroad must file a tax return for all income...

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December 17, 2014

While the media has been feasting on Lux Leaks and other stories of “multinational tax dodging”, academic accountants have determined that U.S. multinational corporations (MNCs) have no particular tax advantage over U.S. domestic firms. In fact, a...

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December 16, 2014

The U.S. Senate has approved a one-year extension of the tax extenders bill, a grab bag of around 50 tax provisions for businesses and individuals. The bill will cost $42 billion over ten years and applies retroactively to the 2014 tax year. The House of Representatives passed their version of the bill last week.

The one-year extension passed by the House and Senate leaves the package...

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