Individual Taxes Archive
TPC Answers Two Questions About Its Analysis of the House Ways & Means Committee’s Tax Bill
September 29, 2021
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TweetShareSharePin0 Shares After the Tax Policy Center published its new analysis of the House Ways & Means Committee’s budget reconciliation tax plan, commentators asked two questions: Why did TPC suddenly create two sets of distributional tables: One that includes all major provisions of the bill and another that includes the individual income tax, the payroll
Whose Child Is It Anyway? The Ways & Means Definition Makes It Harder for The IRS To Know
September 27, 2021
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TweetShareSharePin0 Shares To paraphrase Tolstoy, all simple families are alike; each complicated family is complicated in its own way. So when the tax code aims to deliver benefits for kids, expect complexity. But the proposed monthly child tax credit (CTC) in the Ways and Means reconciliation bill reaches new heights. It would extend the expansions
How To Fix the Problem of Small Retirement Accounts
September 21, 2021
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TweetShareSharePin0 Shares Not only do many American fail to save enough for retirement, but many workers are plagued by a different, but related problem: They have collected multiple small job-based retirement accounts such as 401(k)’s. This is a problem because, when changing jobs, workers are more likely to cash out or lose track of small
Effective Income Tax Rates Have Fallen for The Top One Percent Since World War II
September 15, 2021
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TweetShareSharePin0 Shares While average effective tax rates barely changed in the US from 1945 to 2015, the average tax rates of high-income households fell sharply—from about 50 percent to 25 percent for the highest income 0.01 percent and from about 40 percent to about 25 percent for the top 1 percent. Our measure of effective
Was The Senate’s Heated Crypto Tax Reporting Debate Much Ado About Nothing?
September 10, 2021
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TweetShareSharePin0 Shares When Congress debates major legislation, the public often focuses on a single narrow issue—one frequently irrelevant to the main point of the bill. It happened when the Senate debated the $1 trillion infrastructure measure last month: Many paid outsized attention to tax reporting for cryptocurrency, a proposal that would have funded less than
An Expanded Child Tax Credit Would Reduce Poverty to Below 10 Percent in Nearly All States
September 8, 2021
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TweetShareSharePin0 Shares The American Rescue Plan’s (ARP) expanded Child Tax Credit (CTC) would reduce child poverty in a typical year below 10 percent in 47 states – if it is extended beyond 2021. Absent an extension, child poverty in a typical year would be below 10 percent in just 13 states. A new study by
What’s Easier: Killing Aliens, Or Levying A Vehicle-Mileage Tax?
September 1, 2021
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TweetShareSharePin0 Shares My teenaged son and I just watched the science-fiction thriller “The Tomorrow War,” in which a future government drafts present-day civilians to travel forward in time and fight an alien invasion. It turns out (spoiler) that the extra-terrestrials had crashed into one of Earth’s glaciers centuries ago. Climate change melts the ice and
Would Extending More Generous Tax Credits Increase The Number Of Non-Income Tax Payers?
August 25, 2021
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TweetShareSharePin0 Shares We know the pandemic and the policy response to it dramatically increased the number of households that did not pay federal individual income tax in 2020 and will do so again this year. The bump was transitory, caused by a troubled 2020 economy and enactment of massive but temporary tax cuts. But what
Retirement Tax Benefits Exacerbate Racial Inequities
August 24, 2021
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TweetShareSharePin0 Shares In a recent report co-authored with University of Chicago Professor Daniel Hemel, I described how our retirement tax system favors the rich disproportionately. But it’s worse than that: Our system of generous tax subsidies for retirement savings—such as 401(k) plans, other defined contribution plans, and individual retirement accounts (IRAs)—also exacerbates racial inequities. Due
The COVID-19 Pandemic Drove A Huge, But Temporary, Increase in Households That Did Not Pay Federal Income Tax
August 18, 2021
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TweetShareSharePin0 Shares The COVID-19 pandemic and the policy response to it led to an extraordinary increase in the number of American households that owed no federal individual income tax in 2020. The Tax Policy Center estimates that last year more than 107 million households, or nearly 61 percent, owed no income tax or even received
