On Wednesday, the Tax Policy Center (TPC) released estimates on the portion of households with no federal income tax liability, finding that in 2020, about 60.6 percent of households did not pay income tax, up from 43.6 percent of households in 2019. Much of the 2020 increase was due to pandemic-related factors, but the growing […]
A key theme of our Options for Reforming America’s Tax Code 2.0 is that tax policy is a matter of trade-offs. For example, expanding the generosity of tax credits for lower-income individuals can help make the tax code more progressive, but it also reduces federal revenue. Pairing a credit expansion with a tax offset may […]
President Biden’s newly released budget and the Treasury Department’s “Green Book” of revenue proposals outlines a vision of more spending administered through the tax code. The proposals have revived the debate over the proper role of spending in the tax code, and relies on the Internal Revenue Service (IRS) to further expand beyond its revenue […]
Our new book Options for Reforming America’s Tax Code 2.0 models several tax proposals that would help low-income taxpayers with little impact on overall economic growth. Here we take a closer look at the most extensive of these proposals: restructuring the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) based on the Family […]
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The Joint Committee on Taxation (JCT) recently released data on taxes paid at various levels of income, indicating the federal tax system is progressive, consistent with similar analysis by the Congressional Budget Office (CBO), and the Organisation for Economic Co-operation and Development (OECD). The JCT found that the bottom 50 percent of taxpayers faced an […]
In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States. While proposing ways to pay for new spending and for expanded refundable […]
American Rescue Plan Act of 2021 The United States has provided about $6 trillion in total economic relief to the American people during the coronavirus pandemic, including the $1.9 trillion that was approved when President Biden signed the American Rescue Plan (ARP) Act into law on Thursday, amounting to about 27 percent of gross domestic […]
The nine legislative measures released by the House Ways and Means Committee under the budget reconciliation instructions begins to put legislative text to Congress’ next round of pandemic relief. The nine measures comprise more than half of the $1.9 trillion in additional coronavirus-related relief put forth by congressional Democrats and President Biden. The Ways and […]
Sen. Mitt Romney (R-UT) this week proposed the Family Security Act, which features a new, more generous child allowance for families with children while reforming other sources of aid for low-income individuals. Romney’s plan would replace the existing Child Tax Credit (CTC), which is subject to a minimum income requirement and other limitations, with a […]