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Congressional Budget Office Releases 2017 Data on Household Income and Tax Burdens

Last week, the Congressional Budget Office (CBO) published an updated analysis of the distribution of American households’ income and tax burdens for 2017. The new CBO data reinforces existing trends in household income and tax burdens, showing that the federal tax system is progressive and incomes continued to rise in 2017 as part of the […]

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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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Senate Republican Coronavirus Package Is Undermined by Complexity & Impermanence

The Senate is poised to vote on a coronavirus aid relief package today, which would provide additional funding for individuals, businesses, and states combatting the pandemic. The “Delivering Immediate Relief to America’s Families, Schools, and Small Businesses Act” enters the negotiations as a Senate Republican response to multiple packages proposed by Democrats and Republicans in […]

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Nebraska’s Property Tax Compromise Provides Temporary Relief, but Structural Reform Is Still Needed

On the last day of Nebraska’s recently reconvened 2020 legislative session, legislators today granted final approval to LB1107, a bill to provide state income tax relief to help offset local property taxes paid, as well as to make adjustments to Nebraska’s business incentives program. This compromise is the result of many months of negotiations in […]

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Debunking 3 Myths About the Mortgage Interest Deduction

In 2017—as part of the Tax Cuts and Jobs Act (TCJA)—Congress limited the mortgage interest deduction (MID) by reducing what can be deducted to interest paid on the first $750,00 in principal value, down from $1 million. The decision to curtail the deduction’s limit by 25 percent was partly due to budgetary constraints imposed by […]

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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. […]