The average ACA premium went up: Is its small tax penalty to blame? The New York Times reports that young and healthy individuals find it cheaper to pay the tax penalty for remaining uninsured than an insurance premium for coverage. Without them, the Affordable Care Act health exchanges are struggling to keep premiums down and insurers participating. In 2014, 8.1 million taxpayers were hit with penalties. Through last April, 5.6 million 2015 returns included penalties. The penalty is 2.5 percent of AGI, up to a maximum of $2,085.
The feds nabbed dozens of IRS-fraudsters. The massive call-center scheme, run by 61 people and entities in the US and India,stole hundreds of millions of dollars from Americans. “For nearly four years, this criminal network used a variety of schemes to trick frightened individuals over the telephone by tapping into their worst fears—arrest, deportation and other problems with the U.S. government authorities,” said assistant attorney general Leslie R. Caldwell.
Hillary Clinton’s CTC plan would help very low-income workers and young children. TPC’s Elaine Maag explains how Clinton’s plan for the Child Tax Credit would direct $15 billion toward the poorest workers and increase benefits for low-and middle income families with young children. The most effective and efficient investments in children are made when they are very young; even relatively small boosts in family income during early childhood years matter.
Child tax credits, dependent exemptions, and questions of fairness. TPC's Gene Steuerle considers the issue. "Whatever the right balance between the social welfare and equal justice approaches, most voters judge government on whether they think they are being treated fairly. But if children are both expensive to support and reduce a household’s ability to pay taxes, and if a welfare system separately provides supports for households with low incomes, then shouldn’t adjustment for children put explicitly in the tax system apply to most or all households?"
Should the charitable deduction be available to non-itemizers? Only 25 percent of US taxpayers itemize, and they’re the only ones allowed a deduction for charitable giving. What if all taxpayers could claim that deduction? A new TPC brief by Joseph Rosenberg, Gene Steuerle, Joycelyn Ovalle, and Philip Stallworth analyzes the challenges of implementing a non-itemizer deduction, its possible effects on charitable giving, and ways to make it more effective in terms of cost and IRS enforcement.
Maybe the tax code should be bigger and less progressive… Alan Viard and Sita Nataraj Slavov of the American Enterprise Institute make that suggestion in a new essay. TPC’s Howard Gleckman explains their thinking: “In other words, raise taxes on middle-income households (where the bulk of the money is) to fund government programs that benefit middle- and low-income people without impeding economic growth.” There’s a hitch, though. Political parties would have to flip their rhetoric.
Some viewpoints on the corporate income tax… TPC’s Eric Toder and American Enterprise Institute’s Alan Viard were recently featured in AEI’s VIEWPOINT series. Learn about the effects of cutting the corporate income tax here, and about the flaws of and possible corrections to the corporate income tax here.
Congress is in recess. The Daily Deduction will post Mondays in the interim.
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