Tax expenditures will cost more than $1.4 trillion in fiscal year 2014. Those that support health and housing policies account for more than 40 percent of this number, or about $640 billion. These figures and their accompanying table are calculations derived from the tax expenditure estimates in...
This report tracks the lifetime earnings of men born in the U.S. between 1940 and 1974, focusing on how earnings differences by educational attainment, age, and year of birth have evolved. Both annual and lifetime earnings inequality increased dramatically for men born in the mid-1950s onward....
The mortgage interest deduction is one of the most expensive federal tax preferences. Supporters claim it stimulates homeownership, which creates broad benefits to society beyond the benefits received by owners. But the case for these external benefits is unproven and the deduction is an...
This paper reviews historical trends in economic inequality and tax policys role in reducing it. It documents the various reasons why income inequality continues to rise, paying particular attention to the interplay between regressive and progressive federal and state taxes. The report also...
President Obama and others have proposed increasing the federal earned income tax credit for workers without qualifying children. That would automatically raise state EITCs in the 23 states that calculate a state-level credit for this group as a percentage of the federal credit.
In this testimony before the Senate Finance Committee, Len Burman outlines some of the challenges facing the middle class in 2014 and explores policy options that might help better equip them to meet those challenges, including improving access to higher education and job training and...
The federal government channels much of its support for asset building through the tax code. Asset-building tax subsidies, primarily for homeownership and retirement saving, totaled $384 billion in 2013. This report reviews federal tax expenditures for housing, retirement, savings, business...
Senator Mike Lee's Family Fairness and Opportunity Tax Reform Act (S.1616) would significantly expand tax benefits for children, repeal the alternative minimum tax, and repeal the Affordable Care Act surtaxes on earnings and net investment income. To partially offset the cost of these provisions...
This paper evaluates six options to achieve across-the-board reductions to a group of major exclusions and deductions in the income tax: (1) limiting their tax benefit to a maximum percentage of income; (2) imposing a fixed dollar cap; (3) reducing them by a fixed-percentage amount; (4) limiting...
The federal income tax system provides substantial benefits to families with children. In 2013, the Tax Policy Center estimates that five major child-related tax benefits the earned income tax credit (EITC), the child tax credit, the child and dependent care tax credit, the dependent exemption,...
Tax Subsidies for Health and Housing Top $600 Billion
Tax expenditures will cost more than $1.4 trillion in fiscal year 2014. Those that support health and housing policies account for more than 40 percent of this number, or about $640 billion. These figures and their accompanying table are calculations derived from the tax expenditure estimates in...
Educational Attainment and Earnings Inequality among US-Born Men
This report tracks the lifetime earnings of men born in the U.S. between 1940 and 1974, focusing on how earnings differences by educational attainment, age, and year of birth have evolved. Both annual and lifetime earnings inequality increased dramatically for men born in the mid-1950s onward....
Congress Should Phase Out the Mortgage Interest Deduction
The mortgage interest deduction is one of the most expensive federal tax preferences. Supporters claim it stimulates homeownership, which creates broad benefits to society beyond the benefits received by owners. But the case for these external benefits is unproven and the deduction is an...
Taxes and Inequality
This paper reviews historical trends in economic inequality and tax policys role in reducing it. It documents the various reasons why income inequality continues to rise, paying particular attention to the interplay between regressive and progressive federal and state taxes. The report also...
State Policy and EITC Expansion for Childless Workers
President Obama and others have proposed increasing the federal earned income tax credit for workers without qualifying children. That would automatically raise state EITCs in the 23 states that calculate a state-level credit for this group as a percentage of the federal credit.
Policies to Support the Middle Class
In this testimony before the Senate Finance Committee, Len Burman outlines some of the challenges facing the middle class in 2014 and explores policy options that might help better equip them to meet those challenges, including improving access to higher education and job training and...
Tax Subsidies for Asset Development: An Overview and Distributional Analysis
The federal government channels much of its support for asset building through the tax code. Asset-building tax subsidies, primarily for homeownership and retirement saving, totaled $384 billion in 2013. This report reviews federal tax expenditures for housing, retirement, savings, business...
Preliminary Analysis of The Family Fairness and Opportunity Tax Reform Act
Senator Mike Lee's Family Fairness and Opportunity Tax Reform Act (S.1616) would significantly expand tax benefits for children, repeal the alternative minimum tax, and repeal the Affordable Care Act surtaxes on earnings and net investment income. To partially offset the cost of these provisions...
Evaluating Broad-Based Approaches for Limiting Tax Expenditures
This paper evaluates six options to achieve across-the-board reductions to a group of major exclusions and deductions in the income tax: (1) limiting their tax benefit to a maximum percentage of income; (2) imposing a fixed dollar cap; (3) reducing them by a fixed-percentage amount; (4) limiting...
Child-Related Benefits in the Federal Income Tax
The federal income tax system provides substantial benefits to families with children. In 2013, the Tax Policy Center estimates that five major child-related tax benefits the earned income tax credit (EITC), the child tax credit, the child and dependent care tax credit, the dependent exemption,...