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Publications by Topic
Topic: Distribution of Taxes and Income
The Opacity of Marginal Tax Rates (Article/Tax Facts)
Author(s):
Rosanne Altshuler , Jacob Goldin
Suppose that a taxpayer earns an additional dollar of
income. How much tax would she owe on that dollar? A
natural way to answer this question would be to look up
the taxpayer’s statutory tax rate - the tax rate corresponding
to her tax bracket and filing status.
Published: 10/21/09
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Distributional Effects of Tax Expenditures (Research Report)
Author(s):
Benjamin H. Harris , Katherine Lim , Eric Toder
The largest tax preferences for housing, health care, and retirement saving reduce federal revenues by about 3 percent of GDP. They raise after-tax income proportionally more for higher income groups than lower income groups, but raise income proportionately less for those at the very top. The net distributional effects depend on how these tax preferences are financed. If paid for with higher marginal tax rates, they benefit upper-middle income taxpayers at the expense of both lower-income and the highest-income taxpayers, but if paid for by lower per-capita spending, all high-income groups gain and all low-income groups lose.
Published: 07/21/09
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Tax Stimulus Report Card: Conference Bill (Research Report)
Author(s):
Rosanne Altshuler , Leonard E. Burman , Howard Gleckman , Dan Halperin , Benjamin H. Harris , Elaine Maag , Kim Rueben , Eric Toder , Roberton Williams
This report card evaluates the provisions of the Finance and Ways & Means Committees' conference tax stimulus bill (the "American Recovery and Reinvestment Tax Act of 2009"). The evaluation is preliminary and does not include all of the provisions in the bill most notably we omit provisions related to state and local debt and recovery zone credits. TPC will update the report card if significant changes occur before Congress passes the bill.
Published: 02/13/09
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Tax Stimulus Report Card: Comparing the House and Senate Bills (Research Report)
Author(s):
Rosanne Altshuler , Howard Gleckman , Roberton Williams
This report card compares the provisions of the House and Senate tax stimulus bills (the "American Recovery and Reinvestment Tax Plan of 2009"). The combined evaluation is preliminary and does not include all of the provisions in the bill - most notably we omit provisions related to state and local debt and recovery zone credits. TPC will update the report card as we learn more about specific provisions and as the stimulus bills move through Congress.
Published: 02/03/09
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Tax Stimulus Report Card: Senate Finance Committee (Research Report)
Author(s):
Rosanne Altshuler , Leonard E. Burman , Howard Gleckman , Dan Halperin , Benjamin H. Harris , Elaine Maag , Kim Rueben , Eric Toder , Roberton Williams
The Tax Policy Center has graded the key tax provisions of the pending Senate stimulus bill (the "American Recovery and Reinvestment Tax Plan of 2009"). Our grades, which rely on the bill's legislative language, focus on how well these measures would boost the economy in the short run. Accompanying write-ups describe current law, the proposed change, and the short- and long-term effects on the budget, the economy, fairness and tax complexity. We will update the report card as we learn more about the provisions and as the stimulus bill moves through Congress.
Published: 01/29/09
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Tax Stimulus Report Card: House Bill (Research Report)
Author(s):
Rosanne Altshuler , Leonard E. Burman , Howard Gleckman , Elaine Maag , Eric Toder , Roberton Williams
The Tax Policy Center has graded the key tax provisions of the pending House stimulus bill (the "American Recovery and Reinvestment Tax Plan of 2009"). Our grades, which rely on the bill's legislative language, focus on how well these measures would boost the economy in the short run. Accompanying write-ups describe current law, the proposed change, and the short- and long-term effects on the budget, the economy, fairness and tax complexity. We will update the report card as we learn more about the provisions and as the stimulus bill moves through Congress.
Published: 01/26/09
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President-Elect Obama's Tax and Stimulus Plans (Occasional Paper)
Author(s):
Roberton Williams
During the presidential campaign, Barack Obama proposed a comprehensive tax plan that would raise taxes on high-income taxpayers, cut taxes for low- and middle-income households, and lose $2.9 trillion dollars of revenue over ten years. Obama will take office with the economy in sharp recession and a deteriorating fiscal situation, made worse by new spending on a bailout plan. Faced with those crises, Obama says he will pursue both his campaign tax plan and additional tax-related proposals addressing problems created by the downturn. This paper examines revenue and distributional effects of the tax plan and describes some stimulus proposals.
Published: 01/08/09
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How Big Are Total Individual Income Tax Expenditures, and Who Benefits from Them? (Discussion Papers/Tax Policy Center)
Author(s):
Eric Toder , Leonard E. Burman , Christopher Geissler
Analysts often add up tax expenditures to estimate an aggregate cost, but those tallies are inaccurate because they ignore interactions among provisions. We estimate that interactions raise the cost of nonbusiness tax expenditures by 5 to 8 percent, depending on whether an AMT patch is in effect. In 2007, these tax expenditures totaled about $750 billion—5.5 percent of GDP. While tax expenditures benefit taxpayers in all income groups, high-income households gain more relative to income than low-income ones. Although the AMT eliminates some tax preferences, it increases overall tax expenditures because most AMT taxpayers face higher marginal tax rates.
Published: 12/04/08
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When Marginal and Statutory Tax Rates Differ (Article/Tax Facts)
Author(s):
Benjamin H. Harris , Ruth Levine
From an economic perspective, marginal tax rates play a critical role in determining the consequences of a change in tax policy. In an uncomplicated tax system the marginal rate is simply equal to the statutory rate. For millions of taxpayers, however, marginal tax rates differ markedly from statutory rates. Because of the tax code's wide array of phase-ins and phaseouts the majority of taxpayers face a different marginal rate than their statutory rate. Marginal and statutory rates differ for about two-thirds of married filers and heads of households and for about one-third of single filers.
Published: 11/21/08
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Taxes under Obama and McCain (Article)
Author(s):
William G. Gale , Benjamin H. Harris
Tax policy has been a major issue in the Presidential election campaign, with both candidates proposing extensive changes. The candidates take very different approaches to tax policy. The main differences are two: first, McCain’s plans would reduce revenues by significantly more than Obama’s; and second, McCain’s would be substantially less progressive, especially among very high income taxpayers. From the standpoint of growth or simplicity, both plans disappoint. It is hard to believe that either set of changes would have significant growth effects on the economy.
Published: 11/03/08
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