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Tax News
A Small Step toward Tax Equality for Same-Sex Couples
A trio of recent IRS rulings (here, here, and here) has rekindled debate on how our tax system should treat same-sex couples. Under the Defense of Marriage Act, the federal government does not recognize same-sex marriages. As one consequence, same-sex couples must file individual tax returns even i...
The Tea Party: Tax Cuts and Smaller Government, But More Red Ink
Treasury Secretary Tim Geithner, among others, thinks the tea party movement might help drive deficit reduction. I disagree. I don’t believe most tea party leaders or candidates are remotely interested in slowing the flow of federal red ink. They are plainly interested in tax cuts—a core beli...
More on Taxing Banks
The other day, I posted on a paper by Doug Shackelford, Dan Shaviro, and Joel Slemrod that is a terrific framework for thinking about bank taxes. The authors looked at four ways to tax the banking business in the wake of the recent financial collapse—a transactions tax, a tax on bonuses...
How Blurry is the Line between Monetary and Fiscal Policy?
Economists have traditionally drawn a sharp distinction between monetary and fiscal policy. Monetary policy should try to promote growth and limit inflation by setting short-term interest rates, managing the money supply, and providing liquidity during times of financial stress. Fiscal policy should...
Does A Bank Tax Make Sense?
The temptation to raise taxes on financial institutions is almost too great to resist. These institutions were largely responsible for the recent economic crisis. While the financial collapse cost millions of Americans their livelihoods, many top bank executives happily took their bonuses (in some c...
Should We Dump the Home Mortgage Interest Deduction?
Do we want to use the tax code to subsidize home ownership? And, if we do, is the mortgage interest deduction the best way to do it? A new paper by my Tax Policy Center colleagues Eric Toder and Katherine Lim, along with Urban Institute researchers Margery Turner and Liza Getsinger, asks these provo...
The Property Tax: Unsung Hero
It is not news that state tax revenues have been absolutely hammered in the current economic downturn. But you may be surprised to learn that one local tax has held up relatively well. It is, of all things, the property tax. How can that be, you ask, if so much of the economic mess was c...
How a Jobs-Creating, Loophole-Closing Tax Bill Does Little of Either
I wasn’t going to write about Congress’ latest effort to continue scores of soon-to-expire special interest tax breaks. But there is something about the joint Ways & Means/ Senate Finance Committee bill’s Orwellian title: “The American Jobs and Closing Tax Loopholes Act" (AJACTLA) that m...
The Wyden-Gregg Tax Reform: More Progressive and Roughly Revenue Neutral
The bipartisan tax reform proposal of senators Ron Wyden (D-OR) and Judd Gregg (R-NH) roughly breaks even (as the lawmakers intended) and makes the tax code somewhat more progressive, according to a new analysis by the Tax Policy Center. TPC analysts Jim Nunns and Jeff Rohaly estimate the Wyden-Greg...
An Alternative to the Alternative Minimum Tax
To avoid Greece-like fiscal woes, Congress needs to raise more revenue and cut spending. A value-added tax or a tax on carbon make economic sense, but implementing either could take years. Broadening the income tax base seems politically unrealistic, and Congress already upped tax rates to pay for t...