Tax Analysts Blog

Tuesday, January 10, 2012
In an October 23, 2011, op-ed in The New York Times, Jared Bernstein neatly laid out some earthshaking facts. The former economic adviser to Vice President Joe Biden summarized recent research that says small business is not the engine of job creation that politicians and the press repeatedly claim...
Wednesday, January 4, 2012
Next to support for the troops, nothing is more sacrosanct on Capitol Hill than support for small business. As community leaders and campaign contributors, small business owners have always been near and dear to the hearts of politicians in both parties. The recession has only heightened their stat...
Saturday, December 10, 2011
Rising populism and the desperate need for revenues have sparked renewed interest in a financial transactions tax. Cash-strapped Italy is adopting one. The leaders of France and Germany support the idea of an FTT on an EU-wide basis. In Congress, Democrats in both the House and the Senate have intr...
Friday, December 2, 2011
It is hard to be optimistic about the prospects for corporate tax reform. It was difficult in 1986 and the conditions for corporate tax reform were much more favorable in 1986 then they are now. In the second half of the 1980s our deficit was under control and the economy was growing. We had a popu...
Wednesday, November 23, 2011
U.S. multinational corporations play an invaluable role in the American economy. They are research and export intensive, and they provide tens of millions of high-paying jobs. Their worldwide distribution networks increase demand for domestic research, high-tech manufacturing, and management servic...
Monday, November 7, 2011
Talk about burying the lead! In this morning's Wall Street Journal Stephen Moore reports in the 4th paragraph of an op-ed that super-committee co-chairman Jeb Henserling (R-Tex.) told him: "We have no interest in raising rates--period." (Emphasis added here.) This could imply there is interest in...
Friday, November 4, 2011
Republicans despise the value-added tax. But the flat tax they admire so much is nothing more than a value-added tax split into two parts. A value-added tax is a tax collected from business. The tax base is the difference between business receipts minus purchases from other businesses. There is no...
Monday, October 31, 2011
I hate to drag you away from your fascination with Herman Cain's 999 plan and Rick Perry's flat tax, but if we are going to make real progress, we can't fixate on every overhyped, half-baked tax slogan that comes along. Sooner or later we must get back to basics. Here's the main question: Should ta...
Wednesday, October 26, 2011
The proposal would eventually eliminate U.S. tax on foreign source income from active business. But the exemption would be limited to 95 percent of foreign profits. (The five percent "haircut" that the Japanese have but the British don't is meant to be a rough-justice substitute for rules to limit...
Wednesday, October 26, 2011
The evidence is overwhelming that America's rich are getting much richer while income growth for low- and middle-income earners has stagnated. The share of income and wealth concentrated in the hands of America's superrich is high by both historical and international standards. These facts are hard...
Monday, October 24, 2011
Republicans constantly remind us that the Obama stimulus--the American Recovery and Reinvestment Act of 2009--did not work. They voted against it. In the United Kingdom the government is led by Conservative Prime Minister David Cameron. His government did not adopt stimulus. Instead it boldly enact...
Thursday, October 20, 2011
Who Has Benefited from Economic Growth? Source: Anthony Atkinson, Thomas Piketty, and Emmanuel Saez, "Top Incomes in the Long Run of History," Journal of Economic Literature, 49(1), 2011, 3-71, Table 1. These data are from a recent edition of the prestigious Journal of Economic Literature. The firs...
Monday, October 17, 2011
Cain gets rid of the entire current system—income, corporate, payroll, and estate taxes. In its place he would institute three new taxes. His “9% business flat tax” is simply a value-added tax dressed up to look like a corporate tax. His “9% individual flat tax” is a payroll tax where wages ar...
Wednesday, October 12, 2011
The very rich get most of their income from capital gains. Republicans have tried to sidestep this fact, but you can see it for yourself in the chart below. So any discussion of efforts to increase progressivity -- such as President Obama's so-called Buffett rule -- must include raising the current...
Monday, October 3, 2011
OK, class, settle down. Judging from the less than stellar work you've handed in so far, it looks like most of you have been studying cable TV news instead of the assigned reading. I'm not optimistic about your chances on next week's exam. So I'll tell you what I will do. You will still have to str...
Monday, September 26, 2011
A small business can easily avoid double tax and retain all-important liability protection either by incorporating under state law and adopting subchapter S status for federal tax purposes or by forming a limited liability company under state law and filing as a partnership. So shouldn't every righ...
Monday, September 12, 2011
It is common practice for politicians and the press to use the term "small business" to describe passthrough businesses -- sole proprietorships, partnerships, and subchapter S corporations. From the perspective of economics, this highly inaccurate label is of little significance because -- despite...
Tuesday, September 6, 2011
While the big shots in Washington politics were on vacation, the hardworking economists at Treasury released a technical study shining new light on the employment effects of allowing the top individual rates to return to 36 and 39.6 percent. Using 2007 data, the study shows that between 35 and 47 p...
Wednesday, August 3, 2011
Will the new Select Joint Committee on Deficit Reduction raise taxes? Probably not. That's because it would require at least one Republican to agree to tax hikes and the Republican leadership has vowed not to appoint any member to the Committee who vote to raise taxes. However, down the road, as th...
Monday, August 1, 2011
Without clarification, the deal on the table as of August 1 makes no sense. If the CBO baseline assumes current law, and under current law the Bush tax cuts expire at the end of 2012, extending the Bush tax cuts will be scored as a revenue LOSS and moves us AWAY from second round deficit reduction...