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Document Type: Discussion Papers/Tax Policy Center

1-10 of 32     Back to Types Next>>

How Big Are Total Individual Income Tax Expenditures, and Who Benefits from Them? (Discussion Papers/Tax Policy Center)
Eric ToderLeonard E. BurmanChristopher 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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Are There Opportunities to Increase Social Security Progressivity despite Underfunding? (Discussion Papers/Tax Policy Center)
Melissa M. FavreaultGordon Mermin

This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. It describes how mortality, earnings, disability, childbearing, immigration and emigration, and marriage patterns all differ across U.S. racial/ethnic groups, and highlights the importance of these differences for program outcomes. The paper then uses the DYNASIM model to examine lifetime OASDI redistribution under current law and a trust fund-neutral reform package that would enhance system progressivity and improve outcomes for some vulnerable to retirement poverty.

Published: 11/25/08
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Racial Disparities in Education Finance: Going Beyond Equal Revenues (Discussion Papers/Tax Policy Center)
Sheila MurrayKim Rueben

Education is a key pathway out of poverty, yet schools that primarily serve minority students often fail to provide the educational opportunities available in predominantly white schools. A series of state court cases has addressed one cause of that disparity, the dramatic funding differences that result from reliance on local property taxes to fund schools. This paper examines the success of court-mandated solutions in equalizing spending per pupil across districts serving minority and white students. However, we show that there remains much disparity in other measures of educational quality and outcomes.

Published: 11/03/08
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The Next Stage for Social Policy: : Encouraging Work and Family Formation among Low-Income Men (Discussion Papers/Tax Policy Center)
Adam CarassoHarry HolzerElaine MaagC. Eugene Steuerle

The Earned Income Tax Credit enjoyed marked success bringing low-income women into the labor force in recent years. At the same time, labor force participation by low-income or less-education men stagnated, and declined among young black men. In response to these labor market conditions, this paper analyzes several EITC reform options directed at increasing the EITC for low-income workers, in the hopes of drawing these men into the labor force. We estimate the cost of various proposals and put forth an additional proposal that breaks the EITC into two components – one focused on individual workers and one focused on supporting children.

Published: 10/22/08
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The President's Proposed Standard Deduction for Health Insurance: An Evaluation (Discussion Papers/Tax Policy Center)
Leonard E. BurmanJason FurmanGreg LeisersonRoberton Williams

The paper describes the new standard deduction for health insurance, proposed in the FY2008 Budget, and evaluates the extent to which it would meet its stated goals of expanding health insurance coverage and restraining healthcare spending, and its effects on the distribution of tax burdens in the short and long terms. The basic approach would improve the market for health insurance, but inadequate attention was paid to problems in the nongroup market or those facing households with low incomes. In consequence, the plan could actually reduce overall insurance coverage. The paper suggests a variety of ways in which the proposal could be improved so more people would be covered, including those with low incomes or in poor health.

Published: 02/15/07
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Suppose They Took the AM Out of the AMT? (Discussion Papers/Tax Policy Center)
Leonard E. BurmanDavid Weiner

The individual alternative minimum tax (AMT) was originally intended to assure that high-income people paid at least some tax, but the AMT was poorly designed and affects more middle-income people every year. The AMT raises a lot of tax revenue, however: reforming or eliminating it could cost $500 billion over the next decade. Some suggest that the best option would be to make the AMT the regular tax system. This paper examines the implications of basing a reformed tax system on AMT rules. (A shorter version of this paper is forthcoming in the 97th Annual Conference NTA Papers and Proceedings.)

Published: 08/25/05
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The Distributional Consequences of Federal Assistance for Higher Education: The Intersection of Tax and Spending Programs (Discussion Papers/Tax Policy Center)
Leonard E. BurmanElaine MaagPeter OrszagJeff RohalyJohn O'Hare

For nearly a decade, federal higher education subsidies have increasingly been delivered through the tax code rather than through direct spending programs such as grants, loan subsidies, and work study. This paper reviews the results of using new modules in the TRIM and Tax Policy Center microsimulation models to estimate the distributional impacts and expenditure and revenue effects of major federal higher education tax and spending policies. In addition, the paper reports estimates of the effects of some prototypical policy changes in the Pell Grant program as well as in the Hope and Lifetime Learning tax credits.

Published: 08/19/05
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Deficits, Interest Rates, and the User Cost of Capital: A Reconsideration of the Effects of Tax Policy on Investment (Discussion Papers/Tax Policy Center)
William G. GalePeter Orszag

Under traditional formulations, lower capital income tax rates reduce the user cost of capital and stimulate investment. The traditional approach, however, implicitly or explicitly considers a revenue-neutral reduction in capital income taxation. We extend the traditional approach by considering a reduction in taxes that generates an increase in the budget deficit; the expanded budget deficit may raise interest rates and the opportunity cost of investment. This provides a mechanism through which tax cuts can raise the cost of capital. Representative calculations show that making the administration's recent tax cuts permanent would be to raise the user cost of capital.

Published: 08/19/05
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Tax Subsidies to Help Low-Income Families Pay for Child Care (Discussion Papers/Tax Policy Center)
Leonard E. BurmanElaine MaagJeff Rohaly

Low-income working families face enormous challenges. Key among them is how to pay for decent child care. The largest federal subsidy is the Child and Dependent Care Tax Credit (CDCTC), a nonrefundable tax credit that offsets up to 35 percent of working parents' child care costs, subject to limits. Though not earmarked specifically for child care, the refundable Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) provide more help to low-income working families. This paper considers options to reform the CDCTC to assist low-income families. Expansions to the refundable tax credits that help families with children are also analyzed.

Published: 06/23/05
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Tax Policies to Help Working Families in Cities (Discussion Papers/Tax Policy Center)
Alan BerubeWilliam G. GaleTracy Kornblatt

This paper examines how existing federal tax rules affect low- and middle-income working families in cities, and finds that several tax policy options could provide better economic opportunities and incentives for these households. Policies that expand and modify the child care and dependent care tax credit, the saver's credit, and subsidies for health insurance, or that alter the structure of homeownership subsidies away from deductions and toward capped credits for homeownership, could improve the welfare of millions of working families in cities, and should receive the attention of both urban leaders and federal policy makers in the future.

Published: 06/13/05
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1-10 of 32     Back to Types Next>>