Tax Analysts Blog

Monday, January 28, 2013
European finance ministers ("finance minister" is equivalent to our Treasury Secretary) voted on January 22 to move forward with a plan to tax trades of stock, bonds, and other financial instruments. As a result a financial transactions tax will likely become law in eleven countries--including Germ...
Friday, January 25, 2013
This morning UK GDP figures for the 4th quarter of 2012 were released and the news is bad: the economy shrank by 0.3 percent. After the mini-burst of growth due to the Olympics, the UK economy is back in the doldrums. Some are calling it a triple dip recession. The chart below shows why the UK voti...
Monday, January 21, 2013
After a post-fiscal-cliff lull, the talk about tax reform has picked up again (here, here, and here). But we are no closer than before because of the fundamental irreconcilable differences between the parties. The President and congressional Democrats are insisting on revenues in addition to the $6...
Monday, January 14, 2013
"“It's embarrassing as hell. " That's what senior House Democratic tax-writer Charlie Rangel said last week about President Obama's white-male dominated second term cabinet. Perhaps Mr. Rangel can take some solace in the fact that the agency that adminsters the laws he has been so instrumental in...
Friday, January 11, 2013
According to many commentators the prospects for tax reform are plummeting (Fiscal Times, Reuters, Politico). Although it is always a good bet to be pessimistic about the chances for tax reform, I'd say these writers are overstating the effects of the fiscal cliff on the prospects for tax reform. L...
Friday, December 14, 2012
The Treasury tax expenditure budget tallies the cost of the 15-percent preferential rate on capital gains at $62 billion in 2013. That's a nice chunk of change that could be used for deficit reduction or lowering rates. And because the super rich get a lot of their income in the form of capital gai...
Monday, December 10, 2012
For the federal government the price tag on the charitable deduction was approximately $36.3 billion in 2010. And, as shown in the chart below, 58 percent of that accrued to the benefit of taxpayers with over $200,000 of income. But there is a halo around this tax break. After all, it subsidizes m...
Friday, December 7, 2012
"The main point is not that accusations are often unjustified, but the fact that they are made at all. Tax has news value now and, although often unfounded, 'naming and shaming' attacks on alleged tax avoiders can damage their reputations in the eyes of important stakeholders, which can lead to sha...
Tuesday, December 4, 2012
The lead editorial in this morning's New York Times perpetuates a myth that has become a needless sticking point in the current budget debate. It states: If Mr. Boehner had used a calculator, for example, he would have discovered it is impossible to produce $800 billion in revenue from eliminating...
Monday, December 3, 2012
Until recently it was just a few wild-eyed tax reformers (like myself) who wanted to take away your mortgage interest deduction. Now that Republicans have drawn a no-tax-rate-increase line in the sand over which they will not cross, leading Republicans now find themselves in the position where they...
Friday, November 30, 2012
In October 1985 the Ways and Means committee was in turmoil. Chairman Rostenkowski was desperately trying to get votes to pass his version of President Reagan's plan for tax reform. To pay for lower rates the plan from the White House included complete elimination of the state and local tax deducti...
Monday, November 26, 2012
It seems like a million years ago that John McCain was a leading advocate of cap-and-trade, the economic equivalent of a carbon tax. In 2003 he said: “It is time for the United States government to do its part to address this global problem, and a discussion of mandatory reductions is the form of...
Thursday, November 15, 2012
Prominent Democrats like former Clinton Treasury Secretary Robert Rubin and current New York Senator Charles Schumer are all reading from the same talking points: They are asserting that without rate hikes on the wealthy it is not possible to raise enough revenue--we're talking in the neighborhood...
Friday, November 9, 2012
All the public hears -- and all the politicians want it to hear -- is the siren song of lower rates and implausibly easy deficit reduction through "closing loopholes." And many commentators like to remark that there is bipartisan consensus for tax reform -- especially corporate tax reform -- implyi...
Thursday, November 8, 2012
The table below summarizes some of the more prominent tax reform plans under discussion in recent years. To make life simpler, let's divide the plans getting the most attention into two categories. In the first category, we have two plans proposed not as stand-alone tax reform but as adjuncts to ma...
Wednesday, November 7, 2012
Everybody knows tax reform was an extremely difficult political exercise. But as hard as it was in 1986, tax reform would be much more difficult now. First, the tax system had more potential for reform back in 1986. We had the investment tax credit and unseemly individual tax shelters. The repeal o...
Monday, November 5, 2012
No doubt we are in for some unexpected twists and turns after the election tomorrow. But despite the uncertainty about the outcome of the election and the exact actions the winner will take, much of the immediate future of fiscal policy is predictable. That's because no matter who gets the most ele...
Friday, October 26, 2012
As Richard Kogan at CBPP recently pointed out in an eye-opening paper, the Bowles-Simpson plan does not work as advertised with $4 trillion of total deficit reduction of which only $1 trillion takes the form of tax hikes. The reality is Bowles-Simpson assumes (1) that the Bush tax cuts are not exte...
Friday, October 26, 2012
As noted in prior posts the critical sticking point on a grand bargain to put government finances on a sustainable path is the intransigence of House Republicans to agree to any tax increases. (Senate Republicans numerous times have signalled willingness to compromise on taxes.) The crystal clear r...
Friday, October 12, 2012
In an op-ed in this morning's Wall Street Journal former Michigan governor and current president of the Business Roundtable John Engler writes that "U.S. companies don't get a tax break for moving plants overseas." It is true, as Mr. Engler states, that the U.S. corporate rate--currently the world'...