How much revenue would Bernie Sanders’s proposed financial transaction tax really generate? TPC’s figures about $52 billion over 10 years, while Pollin, Heintz, and Herndon (PHH) estimate nearly six times that, or $300 billion. TPC took a close look at the PHH methodology to understand the disparity. Compared to TPC, PHH (1) expects there to be far more derivative transactions than appear to exist, (2) assumes either much higher transaction costs or much smaller investor responses to the new tax, (3) uses an unconventional method to offset changes in other tax revenues, and (4) accounts for an individual tax credit which TPC did not include since the credit proposal’s lacked clarity.
And about the other candidate tax plans. Yesterday, a TPC panel considered the most interesting tax policies that have surfaced so far in the presidential race. Not only the Sanders transactions tax, but two broad-based consumption taxes, a carbon tax, and record tax cuts and tax increases. And then there are the ideas best forgotten—replacing the IRS with an “office in the Treasury” to collect taxes, multiple new minimum taxes, special tax rates for pass-throughs, and, of course, enormous unfunded tax cuts. To watch, click here.
The House Ways & Means Committee will bid farewell to Janice Mays. She started work with the panel as Democratic tax counsel in 1975, served five Democratic chairmen, and is currently Democratic Staff Director and Chief Counsel. She worked on, among other bills, the Social Security reforms of 1983 and 1984, the Tax Reform Act of 1986, and the Affordable Care Act of 2010. She’ll leave the Hill at the end of May and in July will join PriceWaterhouseCoopers’ Washington tax group.
Also on the Hill. The National Taxpayer Advocate Nina Olson presents her office’s annual report to Congress at the House Oversight and Government Reform Committee today. James Buttonow, chairman of the Electronic Tax Administration Advisory Committee at the IRS will also testify. Next Tuesday, April 19, the House Ways & Means Subcommittee on Oversight will hold a hearing on the tax filing season and IRS efforts to protect taxpayer identity and online safety.
What if taxpayers could defer tax refunds into a savings account when they file? New Jersey Democratic Senator Cory Booker and Kansas Republican Senator Jerry Moran introduced a bill yesterday to allow taxpayers to defer up to 20 percent of their refunds by opting into a savings program. Treasury would hold the savings accounts, pay interest for six months, and then return the money to taxpayers via direct deposit. It’s a useful idea, since we don’t save enough for the future. Of course, not all of us claim our refunds, either.
In case you missed them… TPC’s Frank Sammartino and Kim Rueben consider arguments for and against maintaining the state and local tax deduction from federal individual income taxes. Rueben, Sarah Gault, and Sandy Baum consider how to simplify federal student aid by changing the current formula for calculating Pell grant eligibility.
The IRS just can’t catch a break. Even a coffee break. Yesterday was the Environmental Protection Agency’s deadline for comments on its analysis of the leading driver of bee and other pollinator deaths. Coffee crops thrive with bee pollination and IRS employees (ostensibly) need coffee during the final, harried days of tax season. Ergo, the American Sustainable Business Council, Green America Business Network, coffee companies, and Friends of the Earth thought it would be a good idea to protest at IRS headquarters where they asked employees to forego coffee for a day to imagine a world without bees. (Hint: The day would not be good.) Your tax returns have to be filed by Monday. Would you abstain from coffee with that deadline looming?
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