Looking back at the 2019 tax filing season. For all its early the early drama, the 2019 filing season turned out to be relatively uneventful. TPC’s Howard Gleckman draws some conclusions from the season and TPC’s Mark Mazur shares that “Even though the income on my 2018 joint return was much higher, my household paid a lower effective tax rate than for 1988. Just let that sink in – while America’s fiscal challenges have increased, my tax burden has declined while my income has grown.”
Did you pay to file your taxes when you didn’t have to? ProPublica reports that Intuit’s TurboTax used a series of design tactics, Google Ads, and digital tags to nudge users to pay to prepare their returns, even when they were eligible to file for free. Fewer than 3 percent of those who could use the free version of TurboTax do so, though the IRS reported a modest increase in users this filing season..
The TCJA’s change to survivor benefits hits military families hard. It’s an unintended consequence, but the Tax Cuts and Jobs Act changed the way the IRS handles survivor benefits paid to children. The IRS now must tax those benefits like stocks or other inheritances, which in some case raises taxes by thousands of dollars. Families of fallen service members are demanding a change.
Gaining traction among Democrats: Expanding refundable tax credits. TPC’s Elaine Maag writes that while the Working Families Tax Relief Act (WFTRA) is not the most ambitious tax idea Democratic lawmakers have introduced this year, the plan may resonate well with voters. The WFTRA would increase the EITC for families with children by about 25 percent and quadruple the credit for workers without children living at home.
Can promises made be promises paid for? TPC’s Howard Gleckman reviews Sen. Elizabeth Warren’s detailed, ambitious, and very expensive presidential campaign ideas. She’d raise taxes by trillions of dollars on wealthy individuals and corporations to pay for them, but would that be enough—or politically possible?
Quebec changed the way taxpayers deduct charitable donations, and gifts went up. A new study in Canada’s National Tax Journal by economists Ross Hickey, Bradley Minaker, and Abigail Payne finds that “moving the timing of reporting of gifts on one's tax returns closer to the timing of giving increases average donations by approximately 9 percentage points.” Vox reports that the study underscores just how much tax deductions can be a powerful lever to change how people give. In the US, the TCJA limited the tax benefit of charitable giving by sharply reducing the number of itemizers to about one-in-ten households.
Calculating the impact of deficit reduction. TPC’s Bill Gale, in his new book, outlines one plan to reduce the projected federal debt in 2050 by two-thirds. Researchers at the Penn-Wharton Budget Model (PWBM) confirmed his proposal would reduce debt significantly and boost economic growth.
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