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The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021

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 […]

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House Ways and Means Committee Takes First Steps Toward Additional Coronavirus Relief Legislation

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 […]

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Sen. Romney’s Child Tax Reform Proposal Aims to Expand the Social Safety Net and Simplify Tax Credits

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 […]

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What to Expect During the 2021 Tax Season

In the next few weeks, the Internal Revenue Service (IRS) will begin accepting federal tax returns for the 2020 tax year. The coronavirus pandemic and multiple pandemic-related relief packages passed last year will make the tax season unique for taxpayers and for the IRS. Congress introduced several tax policy changes in 2020 that will impact […]

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A Carbon Tax to Make the TCJA’s Individual Provisions Permanent

Key Findings At the end of 2025, most individual income tax provisions of the Tax Cuts and Jobs Act (TCJA) will expire, increasing taxes on individuals. Making these provisions permanent is estimated to reduce federal tax revenues by $176 billion annually (in 2021 dollars). While making these provisions permanent would increase the long-run size of […]

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Phase 4 Is not the Time to Experiment with Temporary Credits

Members of Congress are on a two-week recess before returning to consider a possible “phase 4” package to boost the economy and help individuals and businesses suffering from the economic effects of the most significant pandemic in the last century. Policymakers may be tempted to reach into the tax code to find a solution to […]

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Three Reasons Expanding Credits Aren’t the Best Pandemic Response for the Vulnerable

Tax policy wonks often advocate for increases in refundable tax credits (e.g., Child Tax Credit, CTC and Earned Income Tax Credit, EITC) and nonrefundable tax credits (Child and Dependent Care Tax Credit, CDCTC) as one solution to help low-income Americans. Arguments in favor of expanding these tax credits appear during economic expansions and contractions alike. […]