Issue Brief posted April 8, 2014
Tax Day 2014: How Tax Reform Would Make Filing Taxes Better
April 15, the day Americans’ tax returns for the previous year are due to the IRS, is fast approaching. Families all over the country are scrambling to find documentation for their incomes and any expenses they incurred that might be deductible, creditable, or exemptible. It is a day of consternation for most families because of the mind-numbing complexity of completing…
Issue Brief posted March 31, 2014
Tax Extenders an Opportunity to Improve the Tax Code
The tax extenders are a group of approximately 50 tax-reducing policies that expire regularly. Congress has traditionally extended them just as regularly as they expire.
Most recently, they expired at the end of 2013, and Congress has yet to address them this year. Congress previously extended them as part of the “fiscal cliff” deal struck at the beginning of 2013. That…
Backgrounder posted March 14, 2014
Chairman Camp’s Tax Reform Plan Keeps Debate Alive Despite Flaws
In February, the chairman of the House Ways and Means Committee, Representative Dave Camp (R–MI), released his long-awaited tax reform plan. Chairman Camp and his staff are to be applauded for the tireless work they put into crafting the plan and for the courage they displayed in releasing it in a difficult environment for tax reform.
Discussion and debate about the…
Backgrounder posted February 19, 2014
The Proper Tax Treatment of Interest
Treating interest properly in the tax code is essential to maintaining neutrality. Neutrality should be the guiding principle of tax reform. It holds that taxes should not influence—positively or negatively—the economic decisions of families, investors, entrepreneurs, or businesses. A neutral tax code is the most conducive to economic growth.
In debates about tax reform…
Issue Brief posted February 6, 2014
Economy Better, but Still Growing Too Slowly Because of Anti-Growth Policy
The new Bureau of Economic Analysis (BEA) report measuring how fast the economy grew in the fourth quarter of 2013 and for the entire year of 2013 confirms that while the U.S. economy has clearly picked up steam, it is still in the grip of a subpar recovery from the recession that ended in 2009.
The cost of this slack-paced expansion—compared to past recoveries—has been…
Issue Brief posted December 19, 2013
Business Tax Reform: Focus on Rate Reduction Now, Save Expensing for Later
Business tax reform is essential to increasing investment and restoring robust job creation and wage growth. Reform is necessary in large part because the U.S. has the highest corporate tax rate in the developed world. This lowers business investment in the U.S. and makes U.S. businesses less competitive in the global marketplace.
The current tax system also generally…
Issue Brief posted October 31, 2013
A Repatriation Holiday Would Not Create Jobs
The House and Senate have convened a conference committee in an attempt to reconcile the very different budgets they passed earlier this year.
Some have suggested that, if the Senate refuses to agree to tax reform in the course of negotiations, the House should seek a repatriation holiday instead. A repatriation holiday would eliminate almost all the tax liability…
Issue Brief posted October 29, 2013
Leave Tax Reform and Tax Increases Out of Budget Conference
The recent deal to end the government shutdown and lift the debt ceiling requires the House and Senate to convene a conference committee, where they will seek to reconcile the respective budgets each chamber passed this year. Conferees will face strong pressure to strike a “grand bargain” to lower the deficit by both cutting spending and raising taxes.
This is the wrong…
Issue Brief posted September 19, 2013
Tax Reform Should Eliminate the Deduction for State and Local Taxes
House Ways and Means Committee chairman Dave Camp (R–MI) and Senate Finance Committee chairman Max Baucus (D–MT) will face many difficult decisions as they proceed on tax reform. Among them will be whether to retain certain deductions currently in the tax code, including the deduction for state and local taxes.
Tax reform should eliminate the state and local tax…
Backgrounder posted September 12, 2013
A Territorial Tax System Would Create Jobs and Raise Wages for U.S. Workers
An intense debate is raging over the proper way to repair the broken system the U.S. uses to tax its international businesses. There is widespread agreement that the current system destroys jobs and suppresses wages for U.S. workers. However, there is a sharp division about how to fix the system’s shortcomings. One side argues for strengthening the current worldwide…
Issue Brief posted June 14, 2013
Senate Immigration Bill Does Not Require Payment of All Back Taxes
There are many serious flaws in the controversial Senate immigration bill, the Border Security, Economic Opportunity, and Immigration Modernization Act (S. 744). One such flaw is that it fails a standard of basic fairness to which immigration has long been held: It does not meaningfully require illegal immigrants to pay back taxes, interest, and penalties on all the…
Issue Brief posted June 4, 2013
CBO Report on “Tax Expenditures” Has It Wrong
The Congressional Budget Office (CBO) released a report on the distribution of “tax expenditures” that some are wrongly using to push for additional tax increases. This was inevitable because the report takes the wrong approach to the issue.
The CBO misnames “tax expenditures.” Congress has explicitly inserted these provisions (routinely called…
Backgrounder posted June 4, 2013
PEP and Pease Hurt Larger Families Most and Slow Growth
After a 12-year hiatus, Congress and President Barack Obama reinstated the personal exemption phaseout (PEP) and “Pease” in the fiscal cliff deal struck in the early hours of New Year’s Day. PEP raises taxes on high-income taxpayers by reducing, then eliminating, the value of their personal exemptions. Pease—which is named after Representative Donald J. Pease, who is…